Prime cost — food cost plus labour cost, combined — is the single most useful number for reading the health of a hospitality business. Enter your monthly figures below.
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Prime cost is the combined cost of food and labour as a percentage of revenue — the two largest controllable costs in almost any hospitality business, and the number that best captures how they interact. A well-run casual restaurant typically runs a prime cost between 55% and 65%; premium venues can sustain a slightly higher prime cost if average spend is strong, while quick-service and café formats usually need to run leaner. For the detailed breakdown behind these ranges, see our guide to restaurant KPIs that actually matter and our note on food cost benchmarks by concept type.
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Total wages including superannuation, payroll tax, workers' compensation and any other on-costs — not just gross wages. Leaving on-costs out understates your real labour cost and gives a misleadingly low prime cost.
Most well-run casual restaurants sit between 55% and 65%. Above 68–70% usually signals structural pressure — either cost drift, an underpriced menu, or an operating model that needs attention beyond simple cost-cutting. Below 55% can sometimes mean pricing power is being left on the table.
Because the two interact. A decision that lowers food cost can raise labour cost (or vice versa) without improving the business overall. Prime cost captures the combined effect, which is a more reliable read on real operating health than either number alone.