Labor cost percentage calculator

Calculate your labor cost percentage

Enter sales excluding VAT or sales tax and labor costs for the same period, using the same currency. Start with the example or replace the amounts with your own figures.

If you have a budget target, add it to see the difference in percentage points. Use your own target and a consistent definition of costs when comparing results.

The formula, with an example

Labor costs ÷ sales × 100 = labor cost percentage.

In a fictional restaurant example, daily sales are 25,000 and labor costs are 7,500 in the same currency. The calculation is 7,500 ÷ 25,000 × 100 = 30%.

If sales fall to 20,000 and labor costs stay at 7,500, the percentage rises to 37.5%. The change comes from lower sales. Review sales and staffing together before adjusting the schedule.

Compare the plan with the result

Before the week starts, compare planned labor costs with forecast sales. After the period, compare actual costs with actual sales. Keep both so you can see where the result differed from the plan.

Check whether the difference came from additional hours, changed pay rates, training or sales above or below expectations. Bring the explanation into the next staff schedule, including any change to opening coverage, breaks or key roles.

Use figures you can compare

• Period: Match costs and sales for the same dates, including your agreed trading day for work after midnight.
• Locations: Include the relevant employees and sales points.
• Costs: Agree how salaries, supplements, leave costs, pensions and other employer costs are included.
• Sales: Keep the treatment of tax, discounts and refunds consistent.

Keep this definition with the report. It helps the next reviewer understand how the percentage was calculated and makes comparisons between periods more useful.

Explore payroll and POS options

To review sales alongside staffing, start by identifying the figures you need and where they come from. Explore payroll and POS integration options and tell us which systems you use.

OnlinePOS and DataLøn are examples of existing integrations. The available information and setup need to fit your systems. The calculator in this guide uses the figures you enter; it does not retrieve data from your POS or payroll system.

Review the figures with the shift in mind

Choose a regular time to review the previous period. Look at hours, sales and the percentage together. Note events, training, sickness or changed opening hours while they are easy to remember.

Check the service too: queues, customer experience, breaks and coverage of essential roles. Use the figures to understand where the next schedule needs a change.

See TitanPlan staffing reports, or request a payroll and POS demo based on the systems you use.

Questions and answers