Restaurant Profit Margin Calculator
Calculate your restaurant's gross, operating, and net profit margins to understand your financial health and benchmark against industry standards.
Total sales including food, beverages, and any other income
Direct food and beverage costs (typically 28–35% of revenue)
Wages, salaries, payroll taxes, and benefits for all staff
Rent, utilities, insurance, marketing, supplies, repairs, etc.
Depreciation, loan interest, one-time costs, taxes, etc.
Formulas Used
Gross Profit = Revenue − COGS
Gross Margin % = (Gross Profit ÷ Revenue) × 100
Operating Profit = Revenue − COGS − Labor − Overhead
Operating Margin % = (Operating Profit ÷ Revenue) × 100
Net Profit = Revenue − COGS − Labor − Overhead − Other Expenses
Net Margin % = (Net Profit ÷ Revenue) × 100
Prime Cost = COGS + Labor
Prime Cost % = (Prime Cost ÷ Revenue) × 100
Prime cost is the most critical control metric in restaurant management.
Assumptions & Industry Benchmarks
- COGS (Food & Beverage Cost): Industry benchmark is 28–35% of revenue. Fine dining may run lower; fast casual higher.
- Labor Cost: Typically 30–35% of revenue including wages, payroll taxes, and benefits (National Restaurant Association, 2023).
- Prime Cost: The sum of COGS and labor. Best-in-class restaurants keep this at or below 55–60%; 65% is the maximum recommended threshold.
- Operating Margin: Average full-service restaurant operating margin is 3–9% (Toast Restaurant Industry Report, 2023).
- Net Profit Margin: Industry average net margin is 2–6%. Above 10% is considered excellent for full-service restaurants.
- Overhead: Includes rent (ideally ≤10% of revenue), utilities, insurance, marketing, and supplies.
- All figures are pre-tax unless taxes are included in "Other Expenses."
- Results are based on the period covered by the inputs (daily, weekly, monthly, or annual — be consistent).