Restaurant net margin health check. The Restaurant Profit Margin Calculator takes monthly revenue, food and beverage cost, labour cost, rent and occupancy, other costs (utilities, marketing, supplies, fees) and returns net profit margin plus monthly profit, prime cost (food + labour) as a share of revenue, food cost percentage. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Hospitality runs on thin margins and high fixed costs, so food cost, labour cost and occupancy need watching weekly rather than yearly. Small pricing and portioning changes move the bottom line quickly. Use the worked example below to check the maths against your own figures.
How the Restaurant Profit Margin Calculator works
Restaurants typically net 3–9%. The number to watch weekly is prime cost: above 65% of revenue there is rarely room for rent and profit.
Worked example
With the example values (monthly revenue of $120,000, food and beverage cost of $38,000, labour cost of $36,000, rent and occupancy of $12,000, other costs (utilities, marketing, supplies, fees) of $18,000), the net profit margin is 13.33%; monthly profit $16,000.00, prime cost (food + labour) as a share of revenue 61.67%, food cost percentage 31.67%. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is net profit margin calculated?
profit = revenue − food − labour − rent − other; prime cost = (food + labour) ÷ revenue.
Which figures do I need?
Monthly revenue, food and beverage cost, labour cost, rent and occupancy, other costs (utilities, marketing, supplies, fees). Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
What benchmarks should I aim for?
Food cost around 28–35% of price, prime cost (food plus labour) under 60–65% of revenue, and steady occupancy or table turns. Track them weekly.
