Intuit Gold PartnerHow to Calculate Labor Cost Percentage by Location
Each location from its own P&L column, and the group from the totals.
To calculate labor cost percentage by location, take each location's labor cost from the P&L by location, divide it by that location's net sales for the same period, and multiply by 100. For the group, divide total labor by total sales. Averaging the location percentages misleads: a small location with a high rate counts as much as a large one. Using Autymate, both figures sit in the P&L by location every period, with no spreadsheet to rebuild.
- Pick one period for both numbers: a month, or four weeks.Your team
- Take each location's net sales from the P&L by location.Automated
- Take each location's labor cost: wages, salaried pay, employer payroll taxes and benefits.Automated
- Split staff who work at more than one location by the hours worked at each.Automated
- Divide each location's labor cost by its net sales, and multiply by 100.Automated
- For the group, divide total labor cost by total net sales.Automated
Sample labor cost percentage by location, October
Sample figures| Location | Net sales | Labor cost | Labor cost % |
|---|---|---|---|
| Downtown | 160,000 | 46,400 | 29.0% |
| Northside | 100,000 | 33,000 | 33.0% |
| Airport | 60,000 | 24,600 | 41.0% |
| Group, total ÷ total | 320,000 | 104,000 | 32.5% |
The filled part is the three locations' labor cost, end to end. The whole bar is their net sales.
- Downtown160,000
- Northside100,000
- Airport60,000
A simple average of the three rates is 34.3%, which overstates the group by 1.8 points: Airport's 41.0% counts as much as Downtown's 29.0%, on less than half the sales.
Want both numbers in your P&L every period? Bring one month's P&L (opens in a new tab)
Restaurant Labor Cost Percentage Benchmarks, With Sources
Measured medians from 2024, with the source and the definition beside each number.
In 2024, labor ran a median 36.5% of sales at full-service restaurants and 31.7% at limited-service restaurants, according to the National Restaurant Association. Profitable operators ran lower, at 34.2% and 30.0%. Citrin Cooperman's full-service top performers ran 31.4% with payroll taxes and benefits included. The 25 to 35% range often quoted is a rule of thumb. The most useful target is your best location's rate, measured the same way everywhere.
Restaurant labor cost as a percentage of sales, 2024
| Restaurants | Labor % of sales | |
|---|---|---|
| National Restaurant Association, medians: salaries and wages, including benefits Source (opens in a new tab) | ||
| Full-service, all operators | 36.5% | |
| Full-service, profitable operators | 34.2% | |
| Full-service, loss-making operators | 42.9% | |
| Limited-service, all operators | 31.7% | |
| Limited-service, profitable operators | 30.0% | |
| Limited-service, loss-making operators | 34.1% | |
| Citrin Cooperman, full-service: labor including payroll taxes and benefits Source (opens in a new tab) | ||
| Top performers | 31.4% | |
| Mid-range performers | 36.4% | |
| Low performers | 40.9% | |
National Restaurant Association medians come from more than 900 operators. Citrin Cooperman's tiers cover more than 50 full-service restaurants with $2 million to $30 million in revenue, ranked by normalized EBITDA: top above 17.5%, mid-range 8.5% to 17.5%, low below 8.5%.
Why Your POS Labor Percentage Doesn't Match the P&L
Three labor numbers from three systems. Only one of them is on the P&L.
The POS shows clocked labor: hours worked times hourly rates, counted by day. The P&L shows booked labor: everything payroll paid, including salaried managers, employer payroll taxes and benefits, posted by pay period. So the POS figure usually runs lower. Use clocked labor to steer this week's schedule and booked labor to report each location's month. Using Autymate, booked labor posts to each location every pay run, accrued at month-end.
Three labor numbers for one location, Northside, October
Sample figures- Scheduled labor
- 22.8%22,800
- The schedule · Planned hours times hourly rates
- Clocked labor
- 23.4%23,400
- The POS or time clock · Hours worked times hourly rates
- Booked labor
- 33.0%33,000
- Payroll, posted to the books · All pay, employer payroll taxes and benefits
Labor % is each amount divided by Northside's 100,000 of net sales.
Each segment is one line of the walk below, on Northside's 100,000 of net sales.
| Segment | Line | Amount |
|---|---|---|
| 1 | Clocked labor in the POS | 23,400 |
| 2 | Salaried manager, not clocked | 4,600 |
| 3 | Bonuses, training pay and corrections made in payroll | 500 |
| 4 | Employer payroll taxes | 2,700 |
| 5 | Benefits, employer share | 1,800 |
| Booked labor on the P&L | 33,000 |
Three more reasons the two numbers drift apart
- Payroll posts by pay period. Without a month-end accrual, a month can carry two pay runs or three.
- Staff clock in at one location and work a shift at another.
- The POS holds an old pay rate, or none, for some staff.
POS and P&L telling different stories? Bring one month of both (opens in a new tab)
Payroll and Sales by Location, in Production
Labor percentage needs payroll and sales in the books. Each half already posts automatically.
Atlas Medstaff connected Bullhorn to NetSuite through Autymate and reports 100% data accuracy for weekly payroll details. For Kidd's Restaurants, a Jimmy John's franchisee, Autymate posts weekly sales for each of its 15 stores from Macromatix into QuickBooks Desktop, saving 40 hours a week. Labor cost percentage by location is those two halves together: payroll posted by location, divided by sales posted by location.
The payroll half
Travel nurse staffing · Bullhorn → NetSuite
- Data accuracy for weekly payroll details
- 100%
The sales half
Kidd's RestaurantsJimmy John's franchisee · Macromatix POS → QuickBooks Desktop
- Stores posting weekly sales into QuickBooks Desktop
- 15
- Hours of entry saved each week
- 40
Results are specific to these customers and are not typical. Your results will depend on your systems and how the work is scoped.
HR and Accounting Integration With Dynamics 365 Business Central
For a staffing firm, the sales half is invoices and the labor half includes contractors.
Autymate built this integration for a staffing firm, between its Bullhorn One middle office and Microsoft Dynamics 365 Business Central. Customers, invoices and credit memos, 1099 and corp-to-corp contractors, and their payable charges post to Business Central as customers, invoices, vendors and accounts payable. Payments and credit memos applied in Business Central return to Bullhorn One as invoice balances. Products, services, customers and vendors are mapped in Autymate's interface, and each exception alert links straight to the fix.
Bullhorn OneMiddle office
Business CentralAccounting system
Autymate SyncMapped in Autymate- Products and services
- Customers
- Vendors
- Bullhorn One to Business CentralBullhorn One, system of record: CustomersBusiness Central, target: Customers
- Bullhorn One to Business CentralBullhorn One, system of record: Invoice details, including credit memosBusiness Central, target: Invoice details, including credit memos, taxes and discounts
- Business Central to Bullhorn OneBullhorn One, target: Invoice balancesBusiness Central, system of record: Invoice payments and credit memos
- Bullhorn One to Business CentralBullhorn One, system of record: 1099 and corp-to-corp contractorsBusiness Central, target: Vendors
- Bullhorn One to Business CentralBullhorn One, system of record: 1099 payable chargesBusiness Central, target: Accounts payable
- System of record
- Target system
For labor cost percentage, the invoices are this firm's sales, and the contractor payable charges are part of its labor cost, beside W-2 payroll.
What Counts as Labor Cost and Net Sales
Taxes and benefits in, withholdings and tips out, and net sales underneath.
Count every cost of the people who work in the location: wages, overtime, salaried pay, bonuses, paid time off, the employer's payroll taxes, workers' compensation and the employer's share of benefits. Employee withholdings are already inside gross wages, so they are not added again. Divide by net sales: sales after discounts, comps and refunds, before sales tax and tips. Then hold that definition the same at every location.
| Item | Counts? | |
|---|---|---|
| Labor cost | ||
| Hourly wages and overtime | In | |
| Salaried pay for managers in the locationOften missing from POS labor reports | In | |
| Bonuses and paid time off | In | |
| Employer FICA, FUTA and state unemployment | In | |
| Workers' compensation | In | |
| Benefits, employer share | In | |
| Employee withholdingsAlready inside gross wages | Not added | |
| Tips customers leave for staffCustomer money passed through payroll | Out | |
| Above-store staff, such as an area managerGroup overhead, or split across locations the same way each month | Your rule | |
| Net sales | ||
| Sales after discounts, comps and refunds | In | |
| Sales tax and tips | Out | |
| Gift card sales | Out until redeemed | |
| Delivery-app ordersGross or net of the app's commission, the same at every location | Your rule | |
Downtown25.0% wages only, 29.0% fully loaded+4.0 points
Northside28.5% wages only, 33.0% fully loaded+4.5 points
Airport35.3% wages only, 41.0% fully loaded+5.7 points
Group28.0% wages only, 32.5% fully loaded+4.5 points
Fully loaded adds employer payroll taxes and benefits to wages. Compare a benchmark on the basis it was measured on.
Labor Cost by Location in QuickBooks Online and NetSuite
Both systems report by location once every payroll line carries one.
In QuickBooks Online, labor cost by location comes from the profit and loss report run by class or location, so every payroll line needs one. Intuit's help article describes one class per employee for payroll run in QuickBooks Online. In NetSuite, every journal line can carry a location, department and class. Using Autymate, outside payroll posts with a location on every line, and an employee who works at two locations is split by hours.
QuickBooks Online
- The report
- Profit and loss, with columns by class or location
- Where a payroll line gets its location
- The employee's class in QuickBooks Online payroll, or each line of the journal entry an outside payroll provider posts
- One employee at two locations
- One class per employee in QuickBooks Online payroll; outside payroll can be split by hours before it posts
- Payroll with no location
- Shows in the Not Specified column
NetSuite
- The report
- Income statement, by location, department or class
- Where a payroll line gets its location
- Each line of the payroll journal entry
- One employee at two locations
- Split across lines by hours before the entry posts
- Payroll with no location
- Reported without a location
QuickBooks Online payroll class tracking as described in Intuit's help article, updated October 6, 2026.
Multi-Entity Payroll, Posted to Each Entity's Books
One payroll account, several LLCs or DBAs, and a set of books for each.
When one payroll account pays staff for several LLCs or DBAs, each entity's wages, employer taxes and benefits belong in its own books. Where one entity's payroll pays staff who work for another, a due-to entry in one set of books and a due-from in the other keep both balanced. Using Autymate, each entity's share posts to its own company file under one mapping template, with the due-to and due-from entries made for you.
- Give each entity or DBA its own company file, or its own subsidiary in NetSuite.
- Use one mapping template, so a pay code posts to the same account in every file.
- Route each employee's pay to the entity they work for.
- Where one entity pays another's staff, post a due-to and due-from pair.
Sample due-to and due-from entries when Downtown LLC's payroll pays Northside LLC's staff, October
Sample figures| Account | Debit | Credit |
|---|---|---|
| Northside LLC's books | ||
| Wages, employer taxes and benefits | 33,000 | |
| Due to Downtown LLC | 33,000 | |
| Downtown LLC's books | ||
| Due from Northside LLC | 33,000 | |
| Payroll clearing and liabilities | 33,000 | |
Each set of books balances on its own, and the two balances match until Northside LLC settles with Downtown LLC.
Several entities on one payroll? Bring the payroll summary (opens in a new tab)
Labor Cost Analysis by Location, Every Period
New stores, transfers, late sales days and corrected runs. The numbers keep up.
Labor cost analysis by location holds only when every pay run and every sales day lands at the right location, including the unusual ones: a new store, a transfer, a late sales day, a corrected run. Autymate's team monitors each run and flags exceptions early, often before your accounting team sees them. Each location's labor percentage can then be compared period to period, on the same basis.
33%
When this happens
What happens next
- A new location opens
- It gets its own location or class in the mapping before its first pay run.
- An employee moves between locations mid-period
- That pay run splits their pay by the hours worked at each.
- A store's sales day is missing
- The day is flagged, and posts once its data arrives.
- A pay period crosses month-end
- The days worked accrue to the month and reverse on the first day of the next.
- A pay run is corrected after it posts
- It is undone and reprocessed as a batch, and the location's labor percentage updates.
Labor Cost Percentage Questions
Yes, using Autymate. Autymate posts each pay run into QuickBooks, NetSuite or another accounting system split by location, with employer taxes and benefits included and shared staff split by hours. It also posts each location's sales from the POS. With both halves in the books, labor cost percentage by location is a report you run every period, from the same P&L your accountant closes.
Track both. Prime cost is food, beverage and disposables plus labor, as a share of sales. It catches what labor percentage alone can hide: labor percentage can fall while food cost rises, for example when prep moves from the kitchen to bought-in product. Calculated from Citrin Cooperman's 2024 full-service figures, prime cost ran 54.5% for top performers, 62.0% mid-range and 68.6% for low performers.
There is no single labor benchmark for franchises, because the concept decides it: full-service and limited-service medians were almost five points apart in 2024. Start from your franchisor's peer figures if it shares them, and set each location's target on the same definition. In a 2025 survey of 304 operators with 10 or more locations, commissioned by Crunchtime, 23% named inconsistent labor cost goals across locations as a top challenge.
Sales per labor hour is net sales divided by the hours worked in the same period. A location with $100,000 of net sales and 1,600 hours worked makes $62.50 per labor hour. It measures productivity rather than cost, so it does not move when pay rates rise, and it comes from clocked hours in the POS rather than from the books. Track it beside labor cost percentage, not instead of it.
Map every pay code to an account, give every wage and employer-tax line a location or class, and post each pay run as one balanced journal entry dated on the pay date. Then match the bank withdrawals to it, and turn off any bank-feed rule that would record the same payroll twice. Using Autymate, that integration is built and run for you, from one or several payroll systems into one or several sets of books.
Multi-location payroll usually means a payroll system that pays staff at several sites, with each site's state and local taxes, pay rates and overtime rules. In the books it means something else: each location's wages and employer taxes posting to that location, or to its own company file. Payroll software handles the first. Autymate handles the second, posting each pay run by location into your accounting system.
Scope depends on how many payroll and POS systems connect, how many locations, entities and company files receive entries, how many staff work at more than one location, and whether accruals, due-to and due-from entries or back periods are part of the work. Autymate scopes each build on a call with your accounting team, starting from one month's P&L.
