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Features of the process of calculating labor costs in a restaurant




Are you the owner of your own restaurant? Then it is worth knowing that it is necessary to provide for labor costs.

Restaurant Labor Costs is the amount of money that you will pay to the employees of your institution. As practice shows, labor costs account for up to 35% of total expenses.

Types of labor costs in a restaurant

There are two categories of labor costs in an institution. Let's look at each of the options in more detail:

  1. Direct costs. They are associated with specialists who are involved in the production of products or services. These are chefs, bartenders, waiters. This expense item is considered the largest, because employees create income for the restaurant, so they need good pay.
  2. Indirect costs. This includes expenses that are associated with specialists who do not produce services or goods directly. These are managers, administrators and maintenance staff.

These are the main types of labor costs in a restaurant. You should take them into account in order to plan your budget correctly.

Stages of cost calculation

The process of resolving the issue consists of several important steps. Let's look at each of them in more detail:

  1. The total number of working hours. The number of hours that the employees of the institution have worked is determined. These are not only bar staff and waiters, but also chefs, managers and other team members.
  2. Calculation of salaries and benefits. The number of hours is multiplied by the hourly salary rate of each employee. Be sure to specify additional benefits in order to get the correct amount without various errors.
  3. Adding taxes on salaries and expenses for compensation to specialists. These costs must also be taken into account. Taxes include social security and medical care. If they are not taken into account, then the final amounts will be erroneous.
  4. Dividing total labor costs by sales volume. Calculations are carried out for a specific period of operation of the restaurant. You will find out the percentage of labor costs, which is important for assessing the financial condition of a business.

Check labor costs regularly and make adjustments to the data if necessary. Thanks to this, the development of your own business will be competent, stable and profitable. Try to optimize labor costs to eliminate unforeseen and large expenses!