What is labour cost percentage?
Labour cost percentage is the proportion of your revenue that goes to paying staff wages. It’s one of the most important metrics for any hospitality business. In the UK, the typical range for restaurants, pubs, and cafes is 25–35% of gross revenue. Quick-service venues tend to be lower (20–25%), while fine dining often runs higher (30–40%).
How to work out labour percentage
Divide what you paid staff in a period by the revenue for the same period, then multiply by 100. A venue that paid £6,300 in wages in a week it took £21,000 has a labour percentage of 30% — £6,300 ÷ £21,000 × 100.
Use the same period for both figures. And be clear what the wages include: this calculator uses gross wages only, so adding employer National Insurance, pension and holiday pay accrual gives a higher, truer percentage.
How to reduce your labour costs
- Schedule based on demand. Match staffing levels to your busy and quiet periods rather than running the same rota every week.
- Track actual hours vs. scheduled hours. Late clock-ins and unapproved overtime add up fast. GPS clock-in removes guesswork.
- Cross-train your team. Staff who can cover multiple roles give you more flexibility without hiring extra heads.
- Reduce no-shows with shift swaps. Let staff arrange their own cover instead of leaving you short-handed.
UK minimum wage rates from April 2026
Rates as at 26 August 2026. Minimum wage rates change every April — check the current rates on GOV.UK before you budget off them.
Rates apply UK-wide
National Minimum Wage and National Living Wage rates are set UK-wide, so these apply whether you trade in England, Scotland, Wales or Northern Ireland.