Restaurant Profit Calculator
Restaurant net profit and prime cost.
Calculate restaurant monthly profit from revenue, food cost %, labour cost %, and fixed overheads. Check prime cost ratio.
What this tool does
This calculator models a restaurant's monthly net profit by deducting operating costs from revenue. It takes your monthly revenue figure and applies food cost and labour cost percentages to estimate those variable expenses, then subtracts fixed monthly costs such as rent, utilities, and insurance to arrive at net profit. The result shows what remains after all operating expenses are accounted for. Revenue and cost percentages have the largest influence on the final figure. A typical scenario might involve a restaurant operator testing how changes in food or labour spending affect profitability. The calculator does not account for seasonal variation, one-off expenses, tax obligations, or changes in pricing strategy, and assumes costs remain proportional to revenue throughout the period.
Quick answer: with the default values, the result is $17,000.00 (Monthly Net Profit). Adjust the values below for your own figures.
Enter Values
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Formula Used
Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Restaurants run on two big variable costs: food (COGS) and labour. Combined, these two are the industry's 'prime cost'. Healthy casual dining sits around 55-65% prime cost, fast casual 50-60%, and fine dining 60-70%. Anything above 70% and fixed costs (rent, utilities, insurance) usually leave the owner taking nothing home.
80k monthly revenue with 30% food, 30% labour, and 15k fixed costs nets 17k profit, about 21% net margin. That's the top end for independent restaurants. The typical sit-down restaurant hits 3-9% net margin; chains with volume and purchasing power reach 10-15%.
Variable costs scale with revenue but fixed costs don't, which is why slow weeks hurt so much. A 20% revenue drop can wipe out profit entirely because fixed costs stay the same. Many restaurants target break-even at 60-65% of capacity.
Run it with sensible defaults
Using monthly revenue of 80,000, food cost of 30%, labour cost of 30%, fixed costs monthly of 15,000, the calculation works out to 17,000.00. The defaults are meant as a starting point, not a recommendation.
The levers in this calculation
The inputs — Monthly Revenue, Food Cost %, Labour Cost %, and Fixed Costs Monthly — do not pull with equal force.
How the math works
Food cost = revenue × food %. Labour cost = revenue × labour %. Net profit = revenue - food - labour - fixed.
Why margin moves faster than revenue
Restaurant margins are dominated by two percentages and one fixed number. At the defaults, 80,000 of monthly revenue at 30% food cost and 30% labour leaves 32,000 after variable costs, and 17,000 after 15,000 of fixed costs. Because fixed costs do not move with revenue, the margin percentage changes faster than revenue does: a 10% fall in revenue removes 3,200 of contribution and cuts profit by nearly a fifth.
What prime cost hides
Prime cost, the food and labour percentages combined, is the figure operators watch most closely, and the calculator makes its effect visible by holding fixed costs separate. What sits outside the model is the split within each percentage: waste, over-portioning, and theft appear inside food cost without being distinguishable from cost of goods, and scheduled hours are not separated from overtime within labour. Seasonality is not modelled at all, so a single month is a poor guide to an annual position.
£80,000 revenue - 30% food - 30% labour - £15,000 fixed = $17,000.00.
Inputs
| Net Margin | 21.25% |
|---|---|
| Gross Profit | $32,000.00 |
| Food + Labour Cost | $48,000.00 |
| Fixed Costs | $15,000.00 |
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
This calculator computes monthly restaurant net profit by deducting three cost categories from revenue. Food cost is calculated as a percentage of revenue, as is labour cost, reflecting these as variable expenses that scale with sales volume. Fixed costs—such as rent, utilities, and insurance—are subtracted as a flat monthly amount independent of revenue. Net profit is the remainder after all three deductions. The model assumes food and labour costs remain constant as a proportion of revenue throughout the period, that fixed costs do not change monthly, and that no other operating expenses exist. It does not account for taxes, seasonal variation, one-time costs, or changes in cost structure as revenue fluctuates.
References
Frequently Asked Questions
What is prime cost?
Why are labour costs so high?
Does this include the owner's salary?
What about delivery apps?
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