Restaurant labor cost calculator
Labor cost is not only wages. Employer payroll tax and turnover replacement cost move the real number by hundreds of basis points, and both respond to structure rather than scheduling.
Your assumptions
Fully loaded annual labor cost
$18,646,750
37.29% of system sales, wages plus payroll tax plus turnover
| System wages | $14,500,000 |
| Employer payroll tax (FICA 7.65%)The line Section 125 structures and tip credits reduce | $1,109,250 |
| Annual separations | 1,688 |
| Turnover replacement cost | $3,037,500 |
| Value of cutting turnover by 20 points | $405,000 |
Planning estimates only. Not tax, accounting or legal advice.
Three labor numbers, not one
Wage cost is the number on the P&L. Employer payroll tax adds 7.65% on top of it before any state unemployment insurance. Turnover cost is largely invisible: it hides inside training, overtime, manager hours and lost productivity rather than sitting on its own line.
At 150% annual turnover — the long-running industry baseline — a 25-unit group with 45 employees per store replaces roughly 1,700 people a year. Even at a conservative replacement cost, that is a seven-figure category nobody budgets.
Structural levers that do not touch scheduling
Section 125 cafeteria plan structures reduce taxable wages, which lowers employer FICA while raising employee take-home pay. FICA tip credits recover employer tax already paid on reported tips. Work Opportunity Tax Credits apply to hiring volume you already have.
Retention benefits attack the turnover line rather than the wage line — a better trade when your wage rate is already at market and your schedules are already tight.
Want the full picture, not one category?
The full savings calculator models every category at once — payments, food, labor, delivery, benefits, fuel and payroll tax credits — and emails you the breakdown.
Calculate my potential savingsFrequently asked
Quick service typically runs 25–30% of sales and full service 30–35%. Prime cost — food plus labor — is the more useful ceiling: keep it under 60–65%.
Yes, through payroll tax structure, tip and hiring credits, back-office consolidation and retention. Those levers change what each labor dollar costs you rather than how many labor dollars you spend.
More calculators