Cafe labor percentage: how to figure it and what to aim for

Labor is usually one of a cafe's two biggest costs, next to cost of goods. Most owners find out it ran hot only when payroll hits. Here's how to see it the next morning instead.

The formula

Labor % = labor cost / net sales x 100.

Example: $640 in wages yesterday on $2,300 in net sales is 27.8%.

Decide once what goes into labor cost and stay consistent. Most owners include hourly wages. Some also add payroll taxes and their own pay. Either way works if you compare like with like.

What to aim for

A common rule of thumb for cafes is somewhere around 25 to 35% of sales. That is a starting range, not a rule. A cafe with a full kitchen, long hours or high local wages will run higher. A grab-and-go window will run lower. Use 4 weeks of your own data to set your target.

Why daily beats monthly

One slow Tuesday with a full crew is noise. Three in a row is a schedule problem. A daily number lets you fix the schedule this week instead of next month.

How to check it in 2 minutes

• Pull yesterday's sales summary and labor report from your POS. In Toast that's Reports > Sales Summary and Labor Summary. In Square it's Reports > Sales Summary and Labor vs. Sales.
• Divide labor cost by net sales.
• Compare to the same weekday last week, not to yesterday.

Let your assistant do it

Paste this into ChatGPT, Claude or Gemini: "Here are yesterday's numbers: net sales [$], labor cost [$]. Work out labor %, compare to my target of [28]% and to last [weekday] at [x]%. Tell me in 2 lines whether to change anything this week."

Never paste passwords or bank numbers into a chat.

Want it every morning without thinking about it?

Numbers by Nine for Cafes sets this up as a daily brief, along with sales, discounts, average ticket and anything else off target. Get the kit or grab 5 free prompts.