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.
Enter Values
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Formula Used
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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. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.
How the math works
Food cost = revenue × food %. Labour cost = revenue × labour %. Net profit = revenue - food - labour - fixed.
What the score tells you
Headline financial numbers — income, savings, debt — each tell part of the story. This calculation stitches several together into a single read you can track over time. The value is in the direction, not the absolute number.
What this doesn't capture
The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.
££80,000 revenue - 30% food - 30% labour - ££15,000 fixed = 17,000.00.
Inputs
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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