Hospitality glossary · Money and margin
Labour cost percentage is total staff cost — wages plus employer National Insurance, pension contributions and holiday pay — expressed as a share of sales for the same period.
In practice
Definitions are easy. What matters is how the thing behaves in a real operation, and where it tends to go wrong.
Most UK hospitality businesses run between roughly 25% and 35%, with wet-led sites at the lower end and full-service restaurants and hotels higher. The figure only means anything when the cost and the sales cover an identical period, which is why weekly measurement is where operators catch a problem and monthly is where they read about one.
Reading the percentage as a verdict on the rota. A weak sales week lifts it without anyone having been over-rostered, and cutting hours in response can suppress exactly the sales that would have brought it back down.
Questions
Something here that doesn’t match what you’re seeing in your own business? That is usually worth a conversation rather than another article.
Labour cost percentage is total staff cost — wages plus employer National Insurance, pension contributions and holiday pay — expressed as a share of sales for the same period. Most UK hospitality businesses run between roughly 25% and 35%, with wet-led sites at the lower end and full-service restaurants and hotels higher. The figure only means anything when the cost and the sales cover an identical period, which is why weekly measurement is where operators catch a problem and monthly is where they read about one.
Reading the percentage as a verdict on the rota. A weak sales week lifts it without anyone having been over-rostered, and cutting hours in response can suppress exactly the sales that would have brought it back down.
WHY Hospitality