Restaurant Prime Cost Calculator: The Most Important Number in Your Business
Prime Cost (COGS + Labor) determines your success or failure. Use our calculator to find your exact Prime Cost percentage and see if you are in the safe zone.
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Disclaimer: The figures provided by this Profit Leak Calculator are estimates based on your inputs and industry averages. They are for informational purposes only and do not constitute financial advice. Actual results may vary.
What is Prime Cost?
Prime Cost is the sum of your Total Cost of Goods Sold (Food & Beverage) and Total Labor Costs (including taxes and benefits). It is widely considered the single most important metric for restaurant profitability.
If your Prime Cost is above 60%, you are likely struggling to make a profit. Our calculator helps you plug in your numbers to see exactly where you stand against industry benchmarks.
Why Calculate Prime Cost?
- It controls the majority of your controllable expenses.
- It gives you an immediate health check of your operations.
- It highlights whether your problem is food waste, scheduling, or pricing.
Lower Your Prime Cost Today
Identifying a high Prime Cost is step one. Step two is fixing it. Our detailed analysis reveals actionable strategies to lower food waste and optimize labor scheduling without sacrificing service quality.
Frequently Asked Questions
How do I calculate Prime Cost?
Prime Cost = Total Cost of Goods Sold (Food + Bev) + Total Labor Cost (Wages + Taxes + Benefits). Divide this number by Total Sales to get your Prime Cost Percentage.
What is a good Prime Cost for a restaurant?
A healthy Prime Cost is generally considered to be 60% or lower. Full-service restaurants can sometimes operate at 60-65%, but Quick Service Restaurants (QSR) often aim for 55% or lower.
Does this calculator include delivery commissions?
Standard Prime Cost does not include commissions, but our tool allows you to factor them in as a "third" prime cost to see your "True Prime Cost" in the age of delivery.