Labor Cost Percentages for Restaurants

Last updated Mar 26, 2025
Written byNick O'Brien

Restaurant Labor Costs: 2025 Benchmarks by Concept Type

Tight profit margins demand a sharp eye on managing your number one cost driver, labor. The latest industry figures expose stark differences between restaurant concepts. Here's the data that shows what you can expect your labor to cost as a percentage based on restaurant type and labor type.

QSRs maintain the leanest operations at 25-30% of revenue for labor, while fine dining restaurants require 35-40%. Fast casual operators split the difference at 28-33%. Market leaders in each segment consistently run 3-5 points below these figures, primarily through ruthless schedule optimization and strategic tech deployment. They are constantly asking themselves, 'How can I create leverage with our operation's and technology to increase output per employee, while maintaining satisfactory working conditions.'

Staff allocation varies dramatically by service model. Fine dining venues pour nearly half their labor budget (45%) into front-of-house teams compared to just 30% at quick-service operations. Kitchen labor eats the biggest slice across all formats (42-50%), though this number shrinks yearly in QSR environments embracing automation. Management payroll hovers between 18-22% industry-wide, though headcount fluctuates substantially between service styles.

Data Methodology

This analysis blends proprietary research conducted January-March 2025 with aggregated POS system data, encompassing over 3,000 restaurant operations nationwide.

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