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Labor cost benchmarks for small restaurants (2026)
Labor at a typical US restaurant costs about a third of sales. The National Restaurant Association's latest data puts the 2024 median at 36.5% of sales for full-service and 31.7% for limited-service, including benefits. Profitable full-service operators ran 34.2%. Operators that lost money ran 42.9%.
If your labor is above 40% of sales, you are in the range where the NRA's data shows losses.
Labor cost as a percent of sales, NRA medians
| All operators, 2024 | Profitable, 2024 | Lost money, 2024 | Average of 2010, 2013, 2016 reports | |
|---|---|---|---|---|
| Full-servicetable service | 36.5% | 34.2% | 42.9% | About 33% |
| Limited-servicecounter, quick service | 31.7% | 30.0% | 34.1% | About 28% |
Swipe the table sideways to see every column.
Salaries and wages including benefits, median share of sales. National Restaurant Association, 2025 Restaurant Operations Data Abstract (2024 data), as published in NRA analysis on Aug 27 and Oct 8, 2025.
So what do you do? Work out your own number the same way: total wages, payroll taxes and benefits for a month, divided by that month's sales. Then compare to the right row. A counter-service shop at 36% is in a worse spot than a full-service restaurant at 36%.
What restaurant workers earn, BLS figures
| Job | Median hourly | Mean hourly | Median yearly |
|---|---|---|---|
| Food prep and serving, incl. fast food | $14.80 | $15.27 | $30,780 |
| Cooks, fast food | $14.81 | $15.54 | $30,810 |
| Waiters and waitresses | $16.93 | $19.16 | $35,210 |
| Cooks, restaurant | $17.87 | $18.37 | $37,170 |
| Supervisors of food prep and serving workers | $20.45 | $21.66 | $42,540 |
Swipe the table sideways to see every column.
BLS Occupational Employment and Wage Statistics, May 2025, national. Local wages differ; check your metro on bls.gov.
average hourly earnings, all employees at food services and drinking places, August 2026 (preliminary).
average weekly hours worked per employee, August 2026 (preliminary). Most restaurant staff are part-time.
people employed at US food services and drinking places, September 2026 (preliminary).
BLS Current Employment Statistics via the Food Services and Drinking Places industry page, read October 2026.
Tipped wage rules: federal and Texas
US Department of Labor, Minimum Wages for Tipped Employees, revised July 1, 2026. Many states set higher rates; check yours.
How much you need to sell to cover a shift
Arithmetic on the public figures above, not data from any one restaurant.
So what do you do? Find the hours where people are on the clock but mostly waiting, or tied to a task a machine can do: answering the phone, taking a table's order, running the card. Those are the hours to move first. Our guide to cutting labor costs without hurting service covers scheduling and forecasting, and prime cost shows labor and food cost together.
Where the hours go at our proof restaurant
At our proof restaurant in Houston, the jobs that used to tie up a person now run on their own. Guests order and pay on their phone at the table, an AI host answers the phone, and every order is paid before it cooks, so nobody's shift is spent at the register or on hold.
of direct orders now place themselves without staff, up from 17% in mid-August 2026.
real phone calls answered by the AI host in three weeks.
side by side with staff before the phone host carries nearly all calls.
October 2026. See table order and pay compared and AI phone hosts compared.
Where these facts come from
- NRA: Restaurant labor costs are well above historical averages - Aug 27, 2025, read Oct 2026
- NRA: Elevated labor costs had a significant impact on restaurant profitability in 2024 - Oct 8, 2025, read Oct 2026
- BLS: Food Services and Drinking Places industry at a glance - CES Aug and Sep 2026 preliminary, OEWS May 2025, read Oct 2026
- US DOL: Minimum wages for tipped employees - revised Jul 1, 2026, read Oct 2026
Questions owners ask
What is a good labor cost percentage for a restaurant?
The National Restaurant Association's 2024 medians are 36.5% of sales for full-service and 31.7% for limited-service, including benefits. Profitable operators ran lower: 34.2% full-service and 30.0% limited-service. Operators that lost money ran 42.9% and 34.1%.
How do I calculate restaurant labor cost percentage?
Add up wages, payroll taxes and benefits for a period, divide by sales for the same period, and multiply by 100. Use the same period for both, such as one month. Compare your result to the NRA median for your segment, full-service or limited-service.
Are restaurant labor costs going up?
Yes. The NRA says 2024 labor costs were well above historical averages: about 33% of sales for full-service and 28% for limited-service across its 2010, 2013 and 2016 reports, against 36.5% and 31.7% in 2024.
What is the average hourly wage for restaurant workers?
BLS reports average hourly earnings of $22.06 for all employees at food services and drinking places in August 2026 (preliminary). Median wages by job in May 2025 ranged from $14.80 for food prep and serving workers to $17.87 for restaurant cooks and $20.45 for supervisors.
What is the tipped minimum wage in Texas?
Texas follows the federal rule: $2.13 an hour cash wage for tipped employees, with a maximum tip credit of $5.12, so tips must bring the server to at least $7.25 an hour. If they do not, the employer pays the difference (US Department of Labor, July 2026).
How can a small restaurant lower labor cost without cutting service?
Move tasks, not hospitality. Phone answering, order taking and payment can run on their own, so staff spend shifts on food and guests. Schedule to forecast demand instead of habit, and cut idle hours during slow periods first.
Send us your labor percentage. We show you which hours can run on their own.
Same-day reply. No vendor commissions, so we recommend whatever fits, including a tool that is not ours.
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