What should restaurant payroll be

First, begin by adding up your total COGS. How you divide this will depend on how your restaurant works. One way to divide up the numbers and gain some additional insight is to use the three classic buckets for restaurant operations:. If your goal is to decrease labor costs, this can help you see which area s might be a good place to start looking for cuts. But if the restaurant is only half-booked and you still have a full staff on the floor, your sales decrease by half, which effectively means your labor cost percentage doubles.

On slow days, you can get by with a partial crew. If a normally busy night is slower than expected, you might need to send some people home early.

One important way of cutting your labor cost percentage that might easily be overlooked is focusing on keeping the employees you have. Keep communication open with your staff and encourage them to bring problems to you.

Make your restaurant a place people want to work, so your team is more likely to stay. Keep in mind that your labor cost percentage is just one small part of the puzzle that is your restaurant budget. Mar 12 Written By Chris Arnett. Accountability Coaching Company Values Culture.

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View All Startup Resources. Profit - Loss. Print Preview. Cave Creek Rd. Restaurant labor costs involve all of the expenses incurred with respect to paying employees, including wages or salaries, employment taxes and employee benefits. To calculate labor cost percentage, divide payroll costs by the total amount of revenue your restaurant earns. Restaurants incur labor costs in every area where personnel work to create food and deliver it to customers.

Wages paid to the hostess who seats diners, the waiter who serves them, the prep and sous chef who prepare their meals, and the busser and dishwasher who clean their dishes are all part of a restaurant's labor costs. Some restaurants also include management salaries as part of their labor costs although conventions vary across the industry, especially for restaurants that are closely managed by their owners.

The less your restaurant spends on labor, the more you have left at the end of the day in profit. Controlling labor costs is a matter of paying close attention to customer traffic flow patterns and adjusting staffing so you have more staff available when you are busy and less staff when you are slow.