What is labor cost percentage?
Labour cost divided by sales for the same period, times 100: the share of revenue spent on staff pay.
Use the scheduled or actual wages for the week (adding overtime premiums and, for a full picture, payroll taxes and benefits) and that week's net sales. Restaurants and retailers track it weekly because the schedule is the lever they control.
Comparing the scheduled cost with forecast sales before the week starts shows whether the rota fits the budget, rather than finding out on payday.
Example: Weekly wages $6,300 ÷ weekly sales $21,000 × 100 = 30%.
Related terms
- Overtime (federal)For non-exempt employees, pay of at least one and a half times the regular rate for hours worked over 40 in a workweek.
- Clopening (rest between shifts)Scheduling the same person to close one night and open the next morning, leaving a short rest between shifts.
On this site
All invoicing, time cards and scheduling terms · Full glossary