Financial Management
Prime Cost Calculator
Calculate your restaurant's prime cost: COGS plus total labor as a percentage of sales. Enter a period's sales, inventory-adjusted food and beverage cost, and fully loaded labor to see where you land against the 55-65% healthy band and a 60% target. Pair it with your monthly budget to catch drift before it eats the month.
Pre-filled with a realistic $140K month for a full-service restaurant. Swap in your own P&L numbers — weekly works even better than monthly.
Period Sales
Cost of Goods Sold
Same method: begin + purchases - end
Total Labor (fully loaded)
Employer FICA, workers' comp, insurance, PTO
Your Prime Cost Percentage
62.9%
Inside the 55-65% band, but above the 60% target.
Green band = 55-65% healthy range. Orange line = 60% target.
COGS %
32.0%
$44,800 · 51% of prime cost
Labor %
30.9%
$43,200 · 49% of prime cost
Prime Cost (COGS + Labor)
$88,000
on $140,000 in sales
$4,000 over
Dollars you would need to pull out of COGS or labor to hit 60%
What Is Prime Cost in a Restaurant?
Prime cost is your cost of goods sold (food plus beverage) added to your total labor cost, expressed as a percentage of sales. It is the share of every dollar that leaves the building before rent, utilities, insurance, or marketing get paid. Restaurant365's operator guidance puts a sustainable prime cost at roughly 60% of food and beverage sales, and most 2026 benchmark sets bracket the healthy range at 55-65%.
Why weekly, not monthly
COGS and labor respond to decisions inside the same week: the schedule you posted, the order you placed, the special you ran. A monthly P&L lands two to three weeks after the damage. At $140K a month, every point of prime cost is $1,400, so a 4-point drift you catch on day 30 instead of day 7 costs you about $4,000 you can never get back. Operators in Forcs' 2026 benchmark data who tracked weekly and held prime cost under 60% ran 3-5 points ahead of their segment. Count inventory on the same day each week and run this calculator every Monday or Tuesday for the prior week.
The Prime Cost Formula (Worked Example)
Prime Cost = COGS + Total Labor
Prime Cost % = Prime Cost / Total Sales x 100
The calculator above is pre-filled with a full-service restaurant doing $140,000 in a month. Here is the math it is running. The per-dish version of the COGS side lives in the food cost calculator, and the underlying formulas are in the food cost formula guide.
| Step | Calculation | Result |
|---|---|---|
| 1. Food COGS | $18,500 + $38,000 - $17,300 | $39,200 |
| 2. Beverage COGS | Same inventory method | $5,600 |
| 3. Total COGS | $39,200 + $5,600 | $44,800 |
| 4. Total labor | $27,500 + $10,800 + $4,900 | $43,200 |
| 5. Prime cost | $44,800 + $43,200 | $88,000 |
| 6. Prime cost % | $88,000 / $140,000 | 62.9% |
| 7. vs 60% target | $88,000 - $84,000 | $4,000 over |
Prime Cost Benchmarks by Concept
Bands below are compiled from Restaurant365 (full service 60-65%, quick service 55-60%) and Forcs 2026 restaurant-finance benchmarks. Treat them as ranges, not pass/fail lines; a high-volume location can live at the top of its band, a low-volume one cannot.
| Concept | Prime cost | Why |
|---|---|---|
| Quick service | 55-60% | Top performers run 52-55%. Low labor, high volume. |
| Fast casual | 58-63% | Better ingredients push COGS up; menu prices carry it. |
| Casual / full service | 60-65% | Server labor is the swing factor. |
| Fine dining | 60-68% | Premium product and skilled labor, offset by check average. |
| Bars & nightlife | 55-60% | Beverage margins absorb labor cost. |
The Inventory Adjustment Most Operators Skip
Purchases are not COGS. If you stock up before a holiday weekend, your purchases spike but half of that product is still on the shelf. Using the invoice total would overstate the week's prime cost; using nothing understates the following week. The fix is the inventory adjustment:
COGS = Beginning Inventory + Purchases - Ending Inventory
Last week's ending count is this week's beginning count. In the example: $18,500 on hand + $38,000 bought - $17,300 left = $39,200 actually used. Run the same math on beverage and log both lines in your restaurant budget template so the trend is visible month to month.
Warning: The Prime Cost Death Spiral
Prime cost hits 68%. The two reflex moves are an across-the-board price increase or quietly shrinking portions and downgrading product. Both push guests away. Sales fall, but the manager, the opening cook, and the minimum floor coverage do not, so labor as a percentage rises. The percentage gets worse while the dollars shrink, which triggers another price hike. Rank the fixes by how little the guest notices: schedule first, purchasing second, the ten worst menu items third, and only then price. Growing the denominator also works; see how to increase restaurant sales.
5 Levers to Bring a 68% Prime Cost Back to 60%
On $140K a month, 68% to 60% is $11,200. No single lever gets there; three of these together usually do.
Re-engineer the 10 worst menu items
Pull item-level food cost. Anything far above your concept's target gets repriced, re-portioned, or cut. Ten items, not the whole menu.
Menu engineering guideSchedule to the sales forecast
Build next week's schedule from last four weeks of hourly sales, not habit. Trim the pre-open hour and the 2-4pm dead zone first.
Schedule templateCount inventory weekly and order to par
A weekly count turns waste, over-portioning, and theft into a number you see within days instead of a surprise on the monthly P&L.
Food cost calculatorRebid your top-spend SKUs
Take your ten highest-dollar purchase lines to two distributors and ask for a quote. Proteins, oil, cheese, and paper are where the money moves.
Check beverage too: pour cost calculatorKill overtime with cross-training
Overtime is paid at 1.5x under the FLSA. A $16/hour line cook on OT costs $24. Cross-train so open shifts get covered at straight time.
Track it in the budget templatePrime Cost vs Food Cost vs Labor Cost
| Metric | Covers | Formula | Target | Blind spot |
|---|---|---|---|---|
| Food cost % | Food COGS only | Food COGS / food sales | 28-32% casual dining | Ignores labor; a cheap menu with a bloated kitchen still loses |
| Labor cost % | Wages, taxes, benefits | Total labor / total sales | 25-35% by service model | Ignores product; a lean crew can't save a 40% food cost |
| Prime cost % | COGS + labor together | (COGS + labor) / total sales | 55-65%, aim for 60% | The one number that shows whether the trade-offs net out |
Related Tools & Guides
Food Cost Calculator
Cost a single dish and compare it to concept benchmarks
Pour Cost Calculator
Per-drink pour cost and target pricing for the bar side of COGS
Restaurant Budget Template
Monthly budget with COGS and labor lines that feed this calculator
Food Cost Formula Guide
Every formula behind food, beverage, and inventory-based COGS
Restaurant Menu Engineering
Find the menu items dragging your prime cost up