Labor cost percentage is payroll divided by sales for the same period. The formula is easy. The useful part is doing it for each day of the schedule you are about to post, because the weekly number averages away the days that lose money.
Labor % = scheduled payroll ÷ projected sales × 100. Scheduled payroll is hours times each person's wage, plus any overtime premium, plus payroll taxes and benefits if you want the full cost. Projected sales is your forecast for the same days, usually last year's or last month's matching week.
An invented café has seven people. The roster builder schedules 216 hours for a payroll of $3,622, and three shifts stay open. Two possible weeks:
| Projected weekly sales | Labor % | Against a 30% target |
|---|---|---|
| $14,000 | 25.9% | $578 under the $4,200 limit |
| $12,000 | 30.2% | $22 over the $3,600 limit |
Now enter daily sales of $1,500, $1,600, $1,700, $1,900, $2,600, $3,200 and $2,400 (Monday to Sunday):
| Day | Hours | Payroll | Sales | Labor % |
|---|---|---|---|---|
| Mon | 32 | $548 | $1,500 | 36.5% |
| Tue | 35 | $604 | $1,600 | 37.8% |
| Wed | 35 | $594 | $1,700 | 34.9% |
| Thu | 35 | $604 | $1,900 | 31.8% |
| Fri | 27 | $470 | $2,600 | 18.1% |
| Sat | 28 | $434 | $3,200 | 13.6% |
| Sun | 24 | $368 | $2,400 | 15.3% |
Tuesday is the worst day at 37.8%, and the weekend runs at about half that. The week as a whole looks acceptable, but staffing is thickest on the quietest days. Moving hours from the early week to Friday and Saturday, within each person's availability and limits, is a decision the daily view makes visible. Daily payroll excludes the overtime premium, which is priced weekly.
There is no single right number. It depends on the kind of business, how much of your service is labor versus product, and your prices. Compare against your own past weeks first; published industry ranges differ by source and should be treated as a rough check, not a target.
Usually yes if you want the true cost of a shift. Wages alone understate it. The roster builder lets you add a burden percentage on top of wages; use the rate your accountant gives you.
A week can sit under target while the quiet days run far over it and the busy days run far under. The daily view shows which shifts to trim and where an extra person pays for themselves.