Restaurant Prime Cost Calculator

Net Sales ($) Beginning Inventory ($) Purchases ($) Ending Inventory ($) Total Labor Cost ($)

Restaurant Prime Cost Calculator

Use our free Prime Cost Calculator to measure your restaurant’s most critical metrics—cost of goods sold (COGS) and labor—and see how they impact your bottom line. Know where your money is going before it’s too late

What Is Prime Cost & Why It Matters

Your prime cost is the combination of:

COGS (food, beverage, and inventory costs)
Total labor costs (salaried + hourly)

Together, these make up 60–65% of your total expenses. Monitoring prime cost is the fastest way to stay profitable in a competitive restaurant market. If you ignore it, you risk razor-thin margins, overstaffing, or wasted ingredients.

Prime Cost Mistakes That Can Eat Into Your Profits

Prime cost > 65%	Food and labor costs are too high	Reduce waste, optimize schedules, renegotiate with suppliers
COGS spikes	Over-ordering, portioning issues, or theft	Track inventory better, control portions, and monitor daily usage
Labor costs creeping up	Overtime, overstaffing, or inefficient scheduling	Improve labor planning, use part-timers, track labor-to-sales ratios
No seasonal adjustment	Same staffing or menu across busy/slow periods	Adapt staffing and food orders by season or sales trends
Inaccurate net sales	Includes discounts, voids, or comps	Always calculate prime cost using true net sales (after adjustments)
Inventory not updated regularly	Skews COGS and makes data unreliable	Count inventory weekly or biweekly
Low-margin, high-volume items	Popular dishes might be dragging down profits	Use prime cost insights to reprice top-selling items
Rarely calculating prime cost	Misses warning signs early	Calculate weekly or monthly to stay in control
Not breaking down by category	Can’t see if labor or food is the bigger issue	Separate into Food COGS, Beverage COGS, Labor (FOH & BOH if possible)
No time comparison	Hard to spot trends or improvements	Compare weekly, monthly, and YoY to make informed decisions

Pro Tip: Monitor Prime Cost Like a Hawk

Restaurants that track prime cost weekly see faster problem detection and improved profitability over time. Don’t wait for your accountant to flag issues—stay in control, in real time.

KNOW = Operations That Make Financial Sense

KNOW helps restaurants move beyond spreadsheets and whiteboards. Track tasks, manage training, digitize checklists, and improve daily efficiency—all of which help bring your prime cost down over time.

Frequently Asked Questions

1. What is prime cost in a restaurant?

Prime cost = COGS + total labor costs. It’s the most important metric to measure operational efficiency and profitability in food service businesses.

2. What’s a good prime cost percentage?

The industry benchmark is 60–65% of net sales. Anything higher, and you’re likely bleeding money through waste, overstaffing, or poor purchasing.

3. How often should I calculate prime cost?

Weekly is ideal. Monthly is the bare minimum. Frequent tracking helps catch issues early and take action faster.

4. Why is my prime cost so high?

Common causes include:

Over-portioning
Untracked food waste
Unoptimized labor schedules
Inaccurate sales or inventory data

5. Can I use this calculator for food trucks or cafes?

Yes! Whether you’re a full-service restaurant, QSR, café, or food truck, tracking prime cost is crucial to staying profitable.