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Labor cost calculator

What your whole team costs per month — hourly and salaried staff, overtime, employer taxes and benefits — and the share of revenue that cost is taking. Nothing stored.

Hourly staff (leave at 0 if none)
Salaried staff and burden
Your revenue (optional, for the percentage)
Monthly labor cost
€29,563
pay + taxes + benefits
Annual labor cost
€354,750
at this month's pace
Burden on top of pay
€5,913
per month, taxes + benefits
Labor % of revenue
32.8%
of monthly revenue

Where the monthly cost goes: hourly pay 46% · salaried pay 34% · employer taxes and benefits 20%

Every euro of revenue carries 33 cents of labor cost, leaving 67 for everything else the business pays for. Whether that is healthy depends almost entirely on your industry — the sourced reference figures are below, and your own trend month over month is a better benchmark than any table.

The labor cost formula

hourly pay        = (rate x hours + rate x 1.5 x overtime hours) x 52 / 12
salaried pay      = annual salaries / 12
burden            = (hourly pay + salaried pay) x burden %
monthly labor     = hourly pay + salaried pay + burden
labor % of revenue = monthly labor / monthly revenue x 100

Two details carry most of the honesty. Weekly hours are annualized through 52 weeks and divided by 12, because “a week times four” understates every month except February. And the burden goes on top of all pay, not just wages: the US federal employer share of Social Security and Medicare is 7.65 percent by statute, and the Bureau of Labor Statistics puts benefits near 30 percent of total compensation for US civilian workers on average, so a burden entry of 20 to 30 percent is normal, not padding.

This page prices the team as an operating line. To price one hire — with equipment, recruiting and what the decision costs in months of runway — use the employee cost calculator; the argument for why the offer-letter number is never the real one is in what a hire really costs.

Labor cost as a share of revenue

Most labor-cost tables on the internet assign every industry a confident percentage with no source. Here are the reference figures that actually have one:

ReferenceFigureSource
Full-service restaurantsMedian 36.5% of sales for salaries and wages including benefits, 2024National Restaurant Association, Restaurant Operations Data Abstract
Limited-service restaurantsMedian 31.7% of sales, same measureNational Restaurant Association, Restaurant Operations Data Abstract
Payroll, general planning range15–30% of gross revenueCommonly cited rule of thumb, not a measured statistic
Benefits share of compensationAbout 30% of total compensation, US civilian workersBLS, Employer Costs for Employee Compensation

The absence of a confident row for your industry is deliberate: where no honest source exists, a made-up percentage is worse than none. Service businesses run structurally high because labor is the product; software and product businesses run lower because revenue scales past headcount. The comparison that always works is your own number, tracked monthly — a rising share at flat revenue is a real signal regardless of what any table says. If your question is specifically about payroll rather than all labor cost, the payroll percentage calculator works the same arithmetic in both directions, including the budget a target share implies.

Common questions

How do you calculate labor cost?

Add up gross pay for the period — hourly wages including any overtime premium, plus salaries — then add employer payroll taxes and benefits on top. Labor cost = gross pay + employer taxes + benefits. For hourly teams, annualize weekly hours through 52 weeks and divide by 12 rather than multiplying a week by four, which understates almost every month.

What is labor cost percentage?

Total labor cost divided by revenue for the same period, times 100. A business with €29,000 of monthly labor cost on €90,000 of revenue runs a labor cost percentage of about 32. It is the number labor cost is actually managed by, because the euro figure alone says nothing about whether the business can carry it.

What is a good labor cost percentage?

There is no universal number, because in service businesses labor is the product. The honest reference points with a named source: the National Restaurant Association's 2024 operations data put median salaries and wages including benefits at 36.5 percent of sales for full-service restaurants and 31.7 percent for limited-service. Outside your own industry's figures, your best benchmark is your own trend month over month.

What is the difference between labor cost and payroll?

Payroll is usually the gross pay that goes to people: wages and salaries. Labor cost is payroll plus everything the employer pays on top — payroll taxes, social contributions, benefits — and some businesses also count recruiting and training. The definitions blur in casual use, so when comparing figures, check what the other number includes before concluding anything.

What is included in labor cost?

Hourly wages and overtime, salaries, employer payroll taxes and social contributions, and benefits. In the US the federal employer share of Social Security and Medicare alone is 7.65 percent of pay, and the Bureau of Labor Statistics puts benefits near 30 percent of total compensation for civilian workers on average. Some definitions add recruiting, training and workers' compensation insurance.

The percentage moves every month. Track it, don't recalculate it.

Plainhub keeps your team cost live by department next to revenue, so the labor share — and what any planned hire does to it — is simply there when you decide.

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