OPERATOR TOOL
Prime cost
Combine cost of goods sold and labor, then measure that total against net sales.
Use all three figures from the same period. Prime cost is not net restaurant profit.
Result
Enter COGS, labor and net sales, then calculate.
Prime cost
Prime cost percentage
Formula
Prime cost = Cost of goods sold + Total labor cost
Prime cost % = Prime cost ÷ Net sales × 100
Last calculation review: October 2026
Need to track multiple periods? The workbook is separate from this free calculator. See workbook options →
Worked example
Illustrative only. If COGS is $8,400, labor is $9,100 and net sales are $28,000, prime cost is $17,500 and prime cost percentage is 62.50%.
What to do next
- Split the total into food/beverage cost and labor before acting.
- Compare actual results with your operating plan and prior periods.
- Investigate price, waste, sales mix and staffing separately.
Questions operators ask
What belongs in COGS?
Use the cost categories your restaurant consistently treats as product cost.
What belongs in labor?
Use a consistent definition that may include wages, payroll tax and benefits depending on your operating reports.
Is prime cost the same as total operating cost?
No. Occupancy and many other operating expenses are outside prime cost.
Read Prime Cost Explained for Restaurant Owners for the weekly review and diagnostic framework behind this calculation.