Managing and tracking labor costs in a restaurant is a significant financial responsibility. Restaurant labor expenses refer to the total expenses incurred by a restaurant for employing and compensating its staff.
These costs encompass various aspects, including hourly wages, salaries, employee benefits, payroll taxes, training expenses, and any additional costs related to restaurant employee management.
Understanding and calculating labor costs are critical for restaurant owners and managers to ensure effective labor budget, maintain profitability, and create a productive and satisfied workforce. Efficient labor cost management plays a significant role in the overall financial health and success of your restaurant business.
Without a spreadsheet or a dedicated software solution, calculating labor costs can cost restaurateurs a lot of valuable time and can become challenging.
In order to simplify the process, we put together a free restaurant labor cost calculator template. It’s fully editable and customizable to your needs and available in both Microsoft Excel and Google Sheets to ensure smooth restaurant operations.
Both the Google Sheets and the Excel templates come with an intuitive interface that requires no advanced spreadsheet skills. Even if you're not a tech-savvy person, you can easily input and analyze data with minimal effort.
The worksheet is equipped with built-in formulas to automatically calculate labor costs based on the data you input. This saves time and reduces the chances of manual errors.
How to use our template for calculating labor costs in your restaurant
The template is straightforward and easy to use.
- Go to File > Make a Copy and save the template to your Drive
- Enter the start date of the week you’d like to track in cell C2.
- The dates and days of the week will automatically update
- Each day of the week has a space for you to enter your total labor cost and total sales.
- Once entered, the labor cost percentage for that day will automatically update in row 8. Once you’ve completed the week, you can see your weekly totals for labor cost, sales, and labor cost percentage
- You can copy the spreadsheet for the next week, or add a tab at the bottom
The importance of tracking labor costs
We don’t need to tell you how tight profit margins in the restaurant industry can be. Every cent is important, and every cost counts against your bottom line.
The average labor cost percentage across the restaurant industry is 30%, so finding ways to track and lower it can go a long way. In order to do that, you’ll first need to calculate it.
Here’s a simple formula for calculating labor cost as a percentage of sales:
Labor Cost Percentage = (Total Labor Cost / Total Sales) x 100
A better way to track and predict labor costs
Our free labor cost template is a great way to get started tracking your restaurant’s labor, but it’s really only scratching the surface.
Dive further into things with Lineup.ai’s labor forecasting software for restaurants.
Lineup.ai's software facilitates effective labor cost management through precise predictions of labor needs and optimized employee auto-scheduling features.
By analyzing historical sales data and integrating external factors such as weather and local events, the software generates accurate labor forecasts, enabling managers to make informed staffing decisions and lower labor costs.
They can set goals for labor cost percentage as it relates to sales, then use Lineup.ai’s reporting feature to monitor performance across locations.
The platform's seamless integration with POS systems automates the forecasting process, reducing manual effort and ensuring that labor hours predictions are based on real-time data. It helps everyone stay on track and be accountable for the success of the business.
The team at Lineup.ai is composed of seasoned professionals who hold deep insights into the unique challenges and pain points of the restaurant industry, and are equally skilled in artificial intelligence, machine learning, and data analytics. This fusion of expertise enables Lineup.ai to create cutting-edge AI solutions specifically tailored for the restaurant sector. The technical and analytical prowess of the team, combined with a deep understanding of the unique challenges faced by restaurants, forms the cornerstone of the company's innovation. The team at Lineup.ai also excels in communicating the benefits and applications of AI and machine learning to businesses, ensuring clients fully leverage the capabilities of these solutions.
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