Profitability
Restaurant Profit
Calculator
Work out your restaurant’s profit and margin from your sales and costs. Start with the simple calculator, or open the Profit Studio for a full profit and loss, prime cost, what-if scenarios, a profit target and a break-even point. Free, with nothing stored.
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Restaurant Profit Calculator
Estimated Operating Profit
$0.00
Expense Breakdown
Enter all expenses as a percentage instead
Enter the figures for one period (a week, a month, a quarter or a year) and keep every amount on the same period. Blank lines count as $0.
Below operating profit (optional): depreciation, interest, income taxes
Type your own amounts to see a net profit figure. Nothing is estimated for you, and tax is not calculated. Leave empty to see operating profit only.
How does each cost move with sales?
Scenarios need a choice for every expense line you filled in. These are your assumptions, not facts about your restaurant and not industry averages. Fixed: the dollar amount stays the same when sales change. Variable: it rises and falls in proportion to sales. Partly variable: only the share you enter moves with sales, the rest stays fixed. A choice marked “Starting assumption” was pre-selected for you and is not confirmed: change it, or press “Keep this choice” once it fits your restaurant. Results say which choices you confirmed and which are still starting assumptions.
Profit and loss, prime cost and margins
Revenue minus the expenses you entered gives operating profit. Gross profit, prime cost, operating profit and net profit are four different figures: each one is defined in the result.
What if sales or costs change?
Arithmetic on your own figures and your own cost choices above. It is not a forecast: guest counts, prices, supplier costs and seasonality are not modelled. Leave a field empty for no change; use a minus sign for a decrease (for example -5).
Change another cost line
What sales reach a profit target?
Works out the sales level at which your cost choices above give the profit or margin you enter, and the sales level at which operating profit is $0. A target of $0 is the break-even point. It does not check whether you have the seats, staff or hours for that volume.
Compare two situations
Situation A is the figures you entered above. Describe situation B below: a change in sales, a change in each cost, or a fixed dollar amount that replaces a line. Not a forecast; it uses the cost choices above. Leave a field empty to keep it as in A.
Expense lineCost change (%)Or set to ($)
Please fix the following:
Start here
What Is Restaurant
Profit?
Restaurant profit is what is left of your sales after the costs of running the restaurant are paid. It is not one number, though. Depending on which costs you subtract, you get gross profit, operating profit or net profit, and prime cost sits alongside them as a cost you watch every week. Two people can look at the same restaurant and give two different answers to “how much did it make?” because they mean different profits.
The calculator keeps them apart. The simple mode gives you operating profit and margin from revenue and six expenses. The Profit Studio’s Profit & loss tab shows every line, gross profit, prime cost, operating profit and, if you enter the items below it, net profit, each with its definition.
Profit, Break-Even, Labor
Which Tool Fits
Your Question?
These tools use some of the same costs but answer different questions.
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Restaurant Profit Calculator You are here
Analyze the result
Question: What is left after the costs I entered?
You get: Operating profit and margin, prime cost, what-if scenarios and a profit target.
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Restaurant Break-Even Calculator
Find a threshold
Question: What sales or orders cover my costs?
You get: Break-even sales and orders from your costs and average check, and a margin of safety.
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Restaurant Labor Cost Calculator
Understand payroll
Question: What does my staff cost, and how does it move with hours and sales?
You get: Labor cost percentage, sales per labor hour, overtime, a labor budget and schedule comparison.
Labor cost is a line in the profit and loss and, when it does not follow sales, a fixed cost in a break-even. Entering the same cost in more than one tool is expected.
Know the difference
Gross Profit, Prime Cost, Operating Profit, Net Profit and Cash Flow
| Measure | How it is calculated | What it leaves out |
|---|---|---|
| Gross profit | Revenue − food cost | Labor, rent and every other cost |
| Prime cost | Food cost + labor cost | Everything else. It is a cost, not a profit |
| Operating profit | Revenue − all operating expenses entered | Depreciation and amortization, interest and income taxes, unless typed into Other expenses |
| Net profit | Operating profit − depreciation and amortization − interest − income taxes | Other non-operating items. No tax is estimated here |
| Cash flow | Not calculated | Money in and out: loan principal, equipment, owner draws, inventory, payment timing |
Because depreciation and amortization sit below operating profit here, this figure is closer to what accountants call EBITDA than to the operating income on a tax return. It is a management estimate built from the figures you enter, not an official accounting figure. If a bank, an investor or your accountant asks for “operating profit,” check which definition they mean.
The formulas
Restaurant Profit Formulas
Operating profit
Revenue − Operating Expenses = Operating Profit
Operating margin
Operating Profit divided by Revenue × 100 = Margin %
Prime cost percentage
Food Cost + Labor Cost divided by Revenue × 100 = Prime Cost %
Net profit
Operating Profit − Depreciation & Amortization − Interest − Income Taxes = Net Profit
Example: revenue $100,000 and operating expenses $85,000 give an operating profit of $15,000 and an operating margin of $15,000 ÷ $100,000 × 100 = 15.0%.
Worked example
A Complete Restaurant P&L,
Line by Line
This is the example the Profit Studio loads when you press Load example. The figures are illustrative, not market data and not a target.
| Line | Amount | % of sales |
|---|---|---|
| Revenue | $100,000 | 100.0% |
| Food cost | $25,000 | 25.0% |
| Gross profit | $75,000 | 75.0% |
| Labor cost | $25,000 | 25.0% |
| Rent / occupancy | $15,000 | 15.0% |
| Utilities | $5,000 | 5.0% |
| Marketing | $5,000 | 5.0% |
| Other expenses | $10,000 | 10.0% |
| Total operating expenses | $85,000 | 85.0% |
| Operating profit | $15,000 | 15.0% |
| Depreciation & amortization | $2,000 | 2.0% |
| Interest | $1,000 | 1.0% |
| Income taxes | $2,500 | 2.5% |
| Net profit | $9,500 | 9.5% |
Read it from the top. Gross profit is $75,000 before any labor or rent is paid. After all six operating lines, $15,000 of operating profit remains, 15.0% of sales. The three items below it (depreciation and amortization, interest and income taxes) bring net profit down to $9,500, or 9.5%. None of the three profit lines is cash: if the restaurant also repaid $4,000 of loan principal that month, that would reduce its cash without appearing anywhere in this table.
In the Profit Studio, the three optional items live under Below operating profit. Leave them empty and the result shows operating profit only.
Two costs, one number
Prime Cost: What It Is
and What It Is For
Prime cost is food cost plus labor cost, shown in dollars and as a percentage of sales. In the example above it is $25,000 + $25,000 = $50,000, which is 50.0% of $100,000 in sales.
It is worth tracking because food and labor are the two costs that production depends on, and they pull against each other: trimming portions lowers food cost, but a menu that needs more prep adds hours. Looking at them as one figure shows whether the two together are in balance with sales, which food cost or labor cost alone cannot show.
No single prime cost percentage is right for every restaurant. It depends on your concept, your menu prices, your service style and how you define each cost, so this calculator does not rate it as good or bad. It shows your own figure so you can compare your own periods. For that comparison to mean anything, decide once what goes into food cost (beverages? paper goods?) and labor cost (managers? payroll taxes? benefits?) and keep the same definitions.
The percentage also tells you what one point is worth. On $100,000 of sales, one point of prime cost is $1,000 of operating profit. If you enter owner pay on its own line, the Profit Studio keeps it out of prime cost and shows prime cost including owner pay as a second line, so you can see both. The Profit and Prime Cost Guide reads a whole month line by line with this convention.
To work out the food half more carefully, start with the Food Cost Calculator and the guide to food cost versus prime cost; for the labor half, the Labor Cost Calculator.
Before you simulate
Fixed, Variable and
Partly Variable Costs
A what-if or a profit target has to answer one question first: when sales change, which costs change with them? The answer is different in every restaurant, so the Profit Studio asks you for it, line by line, in the How does each cost move with sales? section.
Fixed
The dollar amount stays the same when sales change. A lease payment set by contract is an example.
Variable
The amount rises and falls in proportion to sales. Card processing fees, which are a percentage of each sale, are an example.
Partly variable
Only the share you enter moves with sales and the rest stays fixed. A labor schedule with a fixed core and flexible shifts is an example.
Your choice, not ours
The Studio pre-selects only four starting assumptions (food and card fees variable, rent and insurance fixed), marks them as not confirmed, and leaves every other line for you to choose. Results list which choices you confirmed and which are still starting assumptions.
The examples on this page use one illustrative set of choices: food cost variable, labor cost 50% variable, and rent, utilities, marketing and other expenses fixed. Change the choices and the answers change, which is the point.
What-if
What-If Example: Higher Sales,
Higher Food Costs
The same restaurant as above, with the cost choices from the previous section.
| Scenario | Revenue | Expenses | Operating profit | Margin |
|---|---|---|---|---|
| Current figures | $100,000 | $85,000 | $15,000 | 15.0% |
| Sales +10% | $110,000 | $88,750 | $21,250 | 19.3% |
| Food prices +5% | $100,000 | $86,250 | $13,750 | 13.8% |
| Sales +10% and food prices +5% | $110,000 | $90,125 | $19,875 | 18.1% |
| Sales −10% | $90,000 | $81,250 | $8,750 | 9.7% |
A 10% rise in sales adds $10,000 of revenue but only $3,750 of expenses, because rent, utilities, marketing and other expenses stay put and only part of labor moves. Operating profit rises by $6,250, from $15,000 to $21,250, which is 41.7% more profit from 10% more sales. A 5% rise in what you pay for food costs $1,250 of profit. Both together leave $19,875. The same 10% in the other direction takes $6,250 away.
The Studio also shows what one percent is worth under your choices: here, 1% more sales is worth +$625 of operating profit and 1% higher food cost is −$250. To try your own numbers, open the What-if tab; to see two situations next to each other, line by line, use Compare two situations.
This is arithmetic, not a forecast. It does not know whether guests will actually come, whether a price rise changes what they order, or whether you would need more staff to serve 10% more sales.
Working backwards
Profit Target and Break-Even:
What Sales Do You Need?
Once you know which costs are fixed and which move with sales, you can work backwards from a goal. Add up the fixed costs, work out how much of each extra sales dollar is left after the variable costs, and divide:
Sales needed for a profit target
Target Profit + Fixed Costs divided by 1 − Variable Costs as a Share of Sales = Sales Needed
In the example, fixed costs are $47,500 (half of labor, plus rent, utilities, marketing and other expenses) and variable costs are 37.5% of sales, so 62.5% of each extra sales dollar is left. For a $25,000 target: ($25,000 + $47,500) ÷ 0.625 = $116,000, which is 16.0% above $100,000.
A margin target works the same way: for a 20% operating margin the sales needed are $47,500 ÷ (0.625 − 0.20) = $111,764.71. A margin of 62.5% or more cannot be reached by selling more, because that is all that is left of each sales dollar. In that case the Studio says the target is not reachable instead of showing a number.
The break-even point is the same calculation with a target of $0: $47,500 ÷ 0.625 = $76,000 of sales. Your current sales are 24.0% above it, so under these choices sales could fall by about that much before operating profit reaches $0. The Studio shows it, with your headroom, on the Profit target tab.
Two limits come with it. The costs are assumed to keep behaving as you chose at every sales level, and capacity is not checked: $116,000 of sales may need more seats, staff or hours than you have, which the Table Capacity Calculator can help you test. This break-even is a revenue figure read from your own profit and loss, under the cost choices you made. To find a threshold in orders and customers, built from fixed costs, variable costs and an average check, use the Restaurant Break-Even Calculator.
Read this before you rely on it
What This Calculator
Does Not Tell You
It is only as complete as your entries
A line you leave blank is counted as $0. If Food cost, Labor cost or Rent / occupancy is blank, the Studio labels the result Operating profit (incomplete) and says the profit is overstated by the missing cost.
It does not predict anything
What-if, Profit target and Compare are arithmetic on your figures and your fixed or variable choices. Each result lists those assumptions and says it is not a forecast.
It does not check capacity
A sales target can be reachable on paper and impossible in a room with a set number of seats, staff and opening hours. The Profit target result says so and links to the Table Capacity Calculator.
It is not cash flow
Cash flow is not calculated. The Profit & loss result, and the summary you can copy from it, state that operating profit is before depreciation and amortization, interest and income taxes, and that loan principal, equipment, owner draws and inventory are not in it.
It covers one period
One month or one week is a snapshot. Enter another period, with the same definitions, to see a pattern, and use the Period label so your copied summary says which one it was.
It compares you with no one
There is no industry average behind any figure, label or warning. The calculator shows your numbers and how they relate to each other, and leaves the judgment to you and your accountant. It is not tax, legal or accounting advice.
Watch for these
Common Profit
Calculation Mistakes
Leaving out owner pay
If you work in the restaurant, your work has a cost. Put it in Labor cost or on the separate Owner pay line, or operating profit will look higher than it is. Owner draws are not an expense.
Mixing periods
Monthly revenue with weekly rent, or a quarter of labor against a month of sales, gives a meaningless margin. Keep every amount on the same period.
Counting sales tax and tips as revenue
This calculator asks for net sales, before the sales tax you add and before tips. Including them makes every percentage of sales look smaller. Their accounting, tax and employment treatment depends on your situation: ask your accountant.
Treating loan principal as an expense
Repaying principal changes your cash, not your profit. Interest is a cost of borrowing and belongs in the optional interest line below operating profit.
Comparing two “profit margins” without asking which profit
A margin on gross profit, on operating profit and on net profit are three different percentages for the same month. Check which one a number refers to before you compare it with yours.
Leaving a starting assumption unexamined
The four pre-selected cost choices are a place to begin. Press Keep this choice only when it matches how that cost behaves in your restaurant, and change it when it does not.
Keep going
What Should I Calculate Next?
The Profit Studio shows a result for a period. These three steps look at one part of it more closely.
Turn costs into a number of orders
The break-even in the Profit Studio is a revenue figure under cost choices you make. The Break-Even Calculator works from fixed costs, variable costs and an average check, and gives orders and customers as well.
Open the Restaurant Break-Even CalculatorLook closer at the labor line
Labor is half of prime cost. The Labor Cost Calculator separates gross wages, employer costs and overtime, and shows how labor cost moves with hours and sales.
Open the Restaurant Labor Cost CalculatorCheck that a sales target fits your room
This calculator does not check capacity. The Table Capacity Calculator estimates the covers a service could serve from your tables, times and the limits you type.
Open the Restaurant Table Capacity CalculatorAbout this page
Profit here is arithmetic on the lines you enter; it is not cash flow. These are estimates, not accounting, tax or legal advice.
Good to know
Frequently Asked Questions
How do you calculate restaurant profit?
Subtract your operating expenses from your revenue for the same period: revenue minus food, labor, rent, utilities, marketing and every other operating cost. Divide the result by revenue to get the operating margin. The Profit Studio does this line by line and shows each line as a share of sales.
What is the difference between gross profit, operating profit and net profit?
Gross profit is revenue minus food cost. Operating profit is revenue minus all the operating expenses you entered, here before depreciation and amortization, interest and income taxes. Net profit is operating profit after those three items. Each one subtracts more costs than the one before, and none of them is cash flow.
What is prime cost and how do I calculate it?
Prime cost is food cost plus labor cost, usually shown as a percentage of sales. With $50,000 of food and labor on $100,000 of sales, prime cost is 50.0%. No single percentage is right for every restaurant, so compare your own periods using the same definitions of food and labor.
Should owner pay be included in restaurant profit?
If you work in the restaurant, count pay for that work as an expense, either inside labor cost or on the separate Owner pay line. Leaving it out makes operating profit look higher than it is. Owner draws and distributions of profit are not expenses. Ask your accountant how your business structure treats owner pay.
Why does a 10% increase in sales not raise profit by 10%?
Because only the costs that move with sales rise with them. In the worked example, 10% more sales brings in $10,000 more but raises expenses by just $3,750, since rent and other fixed costs stay put. Operating profit therefore climbs $6,250, or 41.7%. With more variable costs the gain would be smaller. It is arithmetic on your choices, not a forecast.
How do I find the sales needed to reach a profit target?
Add the target to your fixed costs and divide by the share of each sales dollar left after variable costs. In the worked example a $25,000 target needs $116,000 of sales, 16.0% above $100,000. The answer holds only while your costs behave as you chose, and it does not check whether your seats and staff can handle that volume.
How should I decide which costs are fixed and which are variable?
Ask what happens to each cost in a busier week. A lease payment is set by contract, so it is fixed. Card fees follow each sale, so they are variable. Labor is often partly both. The Profit Studio pre-selects only four starting assumptions, marks them as not confirmed, and asks you to choose the rest.
Is restaurant profit the same as cash flow?
No. Profit is an accounting result for a period. Cash flow follows the money actually moving in and out. Loan principal, equipment purchases, owner draws, inventory changes and the timing of payments change your cash without changing operating profit. This calculator does not calculate cash flow.
Should revenue include sales tax and tips?
It depends on your situation. This calculator asks for net sales, excluding the sales tax you add and any tips, so each percentage of sales stays measured on what the restaurant sells. How sales tax and tips are recorded in your books, or treated for tax and employment, is a question for your accountant or the authority that applies to you.
How profitable is the average restaurant?
Profitability varies widely by concept, location, pricing, sales volume and cost structure, so this calculator does not compare you with an average. It shows your own figures line by line. Compare your own periods, using the same definitions, to see whether you are improving.
Does the calculator save or send my numbers?
No. The calculations run in your browser. Nothing you enter is stored, saved or sent, and it is gone when you close or refresh the page. The Copy summary and Print buttons are the only way to keep a result.
Calculate Your
Restaurant Profit
Enter your revenue and costs to see operating profit, prime cost and margin, then test a what-if or a profit target in the Profit Studio.