Labor is typically the largest or second-largest expense in any restaurant. Most operators know their labor cost — but far fewer are tracking their labor productivity. That’s where Sales Per Labor Hour (SPLH) comes in.
If you’re only watching your labor percentage, you’re flying half-blind.
What Is Sales Per Labor Hour?
SPLH measures how much revenue your restaurant generates for every hour of labor worked. The formula is simple:
SPLH = Total Net Sales ÷ Total Labor Hours Worked
Example:
- Monday sales: $3,000
- Total hours worked: 60
- SPLH: $50
Compare that to Tuesday:
- Tuesday sales: $2,250
- Total hours worked: 50
- SPLH: $45
Monday was more productive. Even though Tuesday had fewer hours, each hour generated less revenue. Knowing this lets you ask: why? Was Tuesday overstaffed for the volume? Was there a training issue? Was it a slow day that could have been handled with fewer people on?
Why SPLH Beats Labor Percentage Alone
Labor percentage tells you what you spent. SPLH tells you what you got for it.
Consider two restaurants:
- Restaurant A: $10,000 in sales, 30% labor = $3,000 in labor cost
- Restaurant B: $10,000 in sales, 30% labor = $3,000 in labor cost
Same labor percentage. But if Restaurant A ran 100 labor hours and Restaurant B ran 60, Restaurant A’s SPLH is $100 and Restaurant B’s is $167. Restaurant B is significantly more productive — even though the percentage looks identical.
SPLH surfaces that difference. Labor percentage doesn’t.
Setting Your SPLH Target
Your SPLH target will vary based on your restaurant concept, price point, and service model. A quick-service restaurant will have a very different SPLH than a full-service dinner house. The key is to:
- Establish your baseline — track SPLH every day for 30 days
- Find your peak — what’s your best-ever SPLH on a high-volume day with great execution?
- Set a realistic target — aim to hit your top-quartile SPLH consistently
- Compare across days and dayparts — morning rush vs. lunch vs. dinner all have different dynamics
How to Use SPLH in Daily Operations
Pre-shift planning:
Before the day starts, look at projected sales (based on prior year, day-of-week trends, or reservations) and build your schedule backward from your SPLH target.
If your target SPLH is $55 and you’re projecting $2,750 in sales, you should be scheduling approximately 50 hours for that shift.
Mid-shift adjustments:
If it’s 12:30pm and you’re running behind sales projections, that’s a signal to send someone home early. If you’re running ahead, hold your team — you may need the coverage.
Post-shift review:
At the end of every day, log your actual SPLH. Over time, patterns emerge. You’ll see which managers schedule efficiently, which days are hardest to staff correctly, and where your biggest productivity opportunities are.
The Staffing Reality
Here’s something most operators underestimate: the number of people on your schedule is very different from the number of people on your payroll.
If you have 8 people on the floor at a given time, you might need 22+ people on payroll to cover all shifts, part-timers, vacation coverage, and turnover. This means:
- You’re always hiring, or you’re always short
- Turnover is expensive — training a new employee costs time and real dollars
- Scheduling efficiency isn’t just about today; it’s about having enough bench strength to avoid desperate overstaffing
Building a deep bench and investing in retention directly improves your SPLH over time.
SPLH as a Team Goal
One underused application of SPLH: making it a visible team metric.
Post daily SPLH on a whiteboard in the back-of-house. Celebrate high-SPLH days. When the team understands that moving faster, upselling, and staying focused directly impacts this number, productivity goes up. It stops being the manager’s problem and becomes the team’s goal.
The Takeaway
Sales Per Labor Hour is one of the most actionable metrics in restaurant management. It connects staffing decisions directly to revenue outcomes, surfaces productivity gaps that labor percentage misses, and gives you a daily tool for better decision-making.
Track it every day. Set a target. Compare it constantly. Your labor costs will thank you.
Spencer Houlihan is a former CFO for a multi-unit restaurant brand. RestaurantBottomLine.com helps restaurant operators understand the financial metrics that drive real profitability.
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