Prime cost - food plus labor - is the number every operator should watch, because together they are your two biggest and most controllable costs. Most healthy full-service operations keep prime cost at or below 60% of sales; quick service can run a few points leaner. If yours is climbing, the fix is almost never a single line - it is tightening ordering and pars on the food side and scheduling to demand on the labor side, at the same time.
If your prime cost is over target, the fix is a tighter operating system on both food and labor - not a one-off cut. A free MOS audit finds where the points are leaking.
Book a free auditEmbed this calculator on your site - free
Run a blog, association, or resource page for operators? Drop this calculator into any page. Copy the snippet below - attribution is built in.
Frequently asked questions
What is prime cost in a restaurant?
Prime cost is your total cost of goods sold (food and beverage) plus your total labor cost (wages, payroll taxes, and benefits). It captures your two largest and most controllable expenses in one number, usually expressed as a percentage of sales.
What is a good prime cost percentage?
Most healthy full-service restaurants keep prime cost at or below 60% of sales; quick-service can run a few points leaner. Above ~65% it becomes very hard to turn a profit. The National Restaurant Association's 2024 data puts full-service food cost near a 32% median and wages-with-benefits around 36.5%, which is why 60% is the line operators watch.
How do I lower my restaurant's prime cost?
Work both halves at once. On food: tighten pars and ordering to demand, control waste and portioning, and review COGS weekly. On labor: schedule to forecasted demand, watch overtime, and cut idle hours on slow shifts. Cutting one while the other drifts rarely moves the number.
Sources
- National Restaurant Association: Restaurant operators kept food-cost ratios in check in 2024 (2025). Full-service food and non-alcohol beverage costs ran a median of 32.0% of sales in 2024.
- National Restaurant Association: Elevated labor costs had a significant impact on restaurant profitability in 2024 (2025). Full-service wages including benefits ran a median of 36.5% of sales in 2024.
- Lightspeed: The Complete Guide to Restaurant Profit Margins (2025). Healthy food cost runs 28-35%; full-service net margins typically 2-6%; catering ~7-8%.