# What is an average labor cost for restaurants?

According to Nightclub and Bar Magazine, the average labor costs of most restaurants is equal to 30 percent of the restaurant's sales. However, actual labor costs vary based on how many employees a restaurant has, how many hours they work and their rate of compensation. Labor costs include all wages or bonuses paid to employees, but they do not include tips.

In most restaurants, the biggest labor costs come from the kitchen staff. In most cases, wait staff are paid minimum wage or less depending on the state laws, and they use tips to supplement their earnings. Chefs, cooks and managers, in contrast, are paid from the restaurant's coffers, and their wages are usually above minimum wage. According to the Bureau of Labor Statistics, the average chef is paid an annual salary of \$42,000.

To calculate a restaurant's labor costs, one simply needs to add together all the money that was paid to the restaurant's employees over a certain time period. Then, that number needs to be compared to the sales over the same time period. For instance, if a restaurant paid out \$10,000 in wages during a week and collected \$30,000 in sales, their labor costs were the equivalent of 33 percent.

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