Use this free Restaurant Prime Cost Calculator to figure out where you stand in about 30 seconds. Enter net sales, food and beverage cost, and total labor cost for any period. The tool returns your prime cost percentage and compares it to 2026 benchmarks by concept type.
What is prime cost?
Prime cost is food and beverage cost (COGS) plus total labor cost, expressed as a percent of net sales. It captures the two biggest controllable expense lines in the restaurant P&L. If you can only track one number, it’s this one. A restaurant prime cost calculator like the one on this page does the math for you, but the input discipline is the point: pull the numbers the same way every period.
Formula: Prime Cost % = (Food & Beverage COGS + Total Labor Cost) ÷ Net Sales
How to calculate prime cost in 3 steps
- Pull net sales for the period. Net of discounts, comps, and gift-card redemptions. Do not include tax, tips passed through to staff, or third-party delivery gross that you never touched.
- Add food and beverage cost (COGS). Beginning inventory + purchases − ending inventory. If you’re not counting inventory monthly yet, use purchases as a rough proxy and know your number is inflated during a stock-up week.
- Add fully-loaded labor. Wages plus payroll taxes, workers’ comp, benefits, and management salaries. The single most common mistake is using wages only and calling it labor cost.
Then divide the sum by net sales and you have your prime cost. Plug the same three figures into the calculator below to see it side by side with the benchmark for your concept.
Prime cost example with real numbers
A 60-seat full-service restaurant runs a week and pulls: Net Sales $42,800. Food & Beverage COGS $13,268. Total fully-loaded Labor $14,552. Prime Cost = ($13,268 + $14,552) ÷ $42,800 = 65.0%. That lands right at the full-service ceiling. This operator has no room for a bad month. Every menu price change, every schedule adjustment, every waste ticket matters.
Free Tool · Protecting the Bottom Line
Prime cost, food and beverage cost plus total labor, is the single most important number on your P&L. Enter three figures for any period to see your prime cost percentage and how it stacks up against industry benchmarks.
Enter your net sales, food cost, and labor cost to calculate.
Prime cost benchmarks by concept
| Concept | Healthy Prime Cost |
|---|---|
| Full-service restaurant | 60–65% |
| Fast casual | 57–62% |
| Quick-service (QSR) | 55–60% |
Want this tracked automatically, every week?
The Restaurant Finance Toolkit turns this one calculation into a complete system, 5 Excel templates with 1,000+ formulas covering prime cost, labor scheduling, cash flow, break-even, and a full P&L with a KPI dashboard.
Get the Restaurant Finance Toolkit →Benchmarks are general guidelines and vary by market, menu, and service model. Prime cost = (food & beverage cost + total labor cost) ÷ net sales.
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Prime cost FAQ
What is a good prime cost percentage?
Full-service should run under 65%. Fast casual under 62%. Quick-service under 60%. Fine dining can push into the high 60s if beverage mix carries the check average. Above 70% is a math problem, not a demand problem. Something in cost, price, or mix is broken and you’ll find it inside a week if you look.
How do you lower prime cost?
Two levers, in this order. First, menu engineering: reprice or reformulate your five worst items by contribution margin. That moves food cost without touching labor. Second, schedule to sales per labor hour instead of headcount. Cut the shift no one is asking for, not the shift you always cut. Combined, most independents can pull two to four points out of prime cost inside a quarter.
Is prime cost the same as food cost plus labor cost?
Yes and no. Numerically the same. Managerially different. Food cost % and labor cost % viewed alone hide tradeoffs. A cheaper menu that requires more prep pushes food cost down and labor up. Prime cost puts both in one number so you stop optimizing one at the expense of the other.
How often should I check prime cost?
Weekly, using purchases as a stand-in for COGS. Monthly, with a real inventory count. The weekly number catches the drift. The monthly number catches the truth. Doing only the monthly view means you find out about a bad month after the month is over.
What’s the difference between prime cost and CoGS?
COGS is food and beverage cost only. Prime cost adds all labor. COGS answers “am I buying and portioning right?” Prime cost answers “is this location viable?” Both matter. Prime cost matters more.