Prime Cost: What It Is and What Yours Should Be

Prime cost is food cost plus labour cost, expressed as a percentage of sales. Full-service restaurants are commonly advised to keep it at or below 65%, quick-service at or below 60%. It’s the number operators actually manage against because food and labour trade off against each other constantly: buy more prepped product and your food cost rises while kitchen hours fall, so judging either alone leads you into bad decisions.

Figures verified July 2026

Why the two halves can’t be judged separately

Every decision about how much prep you buy in moves both numbers in opposite directions. Scratch kitchens post lower food costs and higher labour; kitchens built on prepped product do the reverse. Neither is wrong, and neither food cost nor labour cost on its own tells you which is working. The sum does.

What’s left after prime cost has to cover everything else

Rent, utilities, insurance, marketing, repairs, professional fees and whatever profit you’re hoping for all come out of the remaining third. That’s the real reason the 65% guideline exists: above it, the arithmetic on the rest of the P&L stops working in most rent situations.

Where these ceilings come from

The 65% and 60% figures circulate widely among hospitality accountants and are quoted more or less universally, but they’re rules of thumb rather than survey findings. Your rent is what really decides how much room you have underneath. A site with cheap rent can carry a higher prime cost than the guideline and still work.

How often to measure it

Monthly is too slow to act on and daily is noise. Most operators who manage this well look at it weekly, against a rolling period, so a single heavy delivery or a quiet Bank Holiday doesn’t send them chasing a problem that isn’t there.

Every figure with its source

Prime cost figures with sources
Figure	Value	Source
Prime cost ceiling, full service¹	65%	The Fork CPAsAccessed July 2026
Prime cost ceiling, quick service²	60%	The Fork CPAsAccessed July 2026
Labour component, full-service median³	36.5%	National Restaurant Association2026
Labour component, limited-service median⁴	31.7%	National Restaurant Association2026
Food component, general range⁵	28–35%	WhippleWood CPAs2026

¹ Commonly quoted guideline rather than survey data.

² Commonly quoted guideline rather than survey data.

³ Wages including benefits.

⁴ Wages including benefits.

⁵ Widely quoted, but nobody surveyed it.

For the same numbers organised by type of business, see the cost benchmarks by food business, and for what staff cost where you trade, see labour costs by region. If you run a table-service site, a restaurant waitlist and paging system is the operational side of the throughput problem these figures keep pointing at.

Run your own numbers

Prime Cost CalculatorCombine food and labor into your prime cost % — the single most-watched number in restaurant P&Ls.Food Cost Percentage CalculatorSee what share of each dish's price goes to ingredients — and how it compares to the 28–35% benchmark.Labor Cost Percentage CalculatorTurn total labor cost and sales into a labor % you can compare against industry norms.Break-Even CalculatorFind the revenue — and the number of covers — you need to cover every cost.

Or raise the number underneath

Prime cost is a percentage of sales, so it improves when sales rise as well as when costs fall. Bzz lifts covers on the same food and the same rota.

Frequently asked questions

What is prime cost in a restaurant?

Food cost plus labour cost as a percentage of sales. It’s the combined figure operators manage against, because the two components trade off against each other.

What is a good prime cost percentage?

65% or below is the guideline commonly quoted for full service, 60% for quick service. Your rent decides how much room you really have underneath.

Why is prime cost more useful than food cost?

Because buying prepped product lowers labour and raises food cost, and doing everything from scratch does the opposite. Looking at one in isolation makes a trade-off look like an improvement.

How do I calculate prime cost?

Add total cost of goods sold to total labour cost including benefits and payroll taxes, divide by total sales for the same period, and multiply by 100.

How often should I check prime cost?

Weekly, against a rolling period. Monthly is too slow to act on, daily is noise.

Labour Cost Percentage by Type of RestaurantWhere each format sits, and why the gaps between them are structural.
Food Cost Percentage by Type of Food BusinessThe quoted ranges by format, and an honest account of where they come from.
Food Business Cost Benchmarks: Every Figure, With SourcesEverything on one page, each figure attributed and dated.

Sources

National Restaurant Association — 2026 State of the Restaurant Industry2026 · Industry research
The Fork CPAs — The Ideal Labor Cost for a Restaurant or BarAccessed July 2026 · Trade press — cited convention, not measured data
WhippleWood CPAs — Restaurant Financial Benchmarks 20262026 · Trade press — cited convention, not measured data