What are labor percentages?
Labor percentages are a common metric used by restaurants and retail stores in particular to help managers understand the financial health of their business.
Labor percentage data is often used to assess whether labor costs are too high or too low compared to the amount of sales coming in.
By calculating labor percentages, you can manage labor costs in relation to revenue and ensure that labor costs stay within your budget. Workfeed can help you keep track of this, completely automatically.
How to calculate your labor percentage
To calculate your labor percentage, take your payroll expenses, divide them by your sales, and then multiply them by 100. See the example below.
Labor percentage = (payroll expenses) ÷ (sales) x 100.
With this simple equation you can calculate your labor percentage per year, quarter,
month, week, day and even hour.
Example:
Restaurant Workfeed's labor rate on a given day.
Payroll expenses on the day: $4,677.50 | Revenue on the day: $24,000.
(4,677.50) ÷ (24,000) x 100
Labor percentage = 19.49%
How to enable the labor percentage
Click on the '👁' icon at the top right of the schedule.
Turn on labor, labor percentage, and additional revenue.
Now enter your revenue below the relevant days, and your labor percentage will be calculated automatically.
How to add additional costs
You can add additional costs the same way you did with labor percentage.
Click on the '👁' icon at the top right of the schedule.
Turn on additional costs.
Now enter your additional costs below the relevant days, and your labor costs will be calculated automatically.