A practical guide for restaurant owners on how to calculate the real cost of your staff, how much it should be as a share of revenue for your type of venue, and what to do if the costs are too high.
In this article
Introduction
What does an employee really cost your restaurant? Not the salary they see on their payslip. What you pay, every month, as the owner.
Many restaurant owners only know half of this number. And the half they don’t know is often the bigger one. Staff costs are the biggest expense in a restaurant. More than food. More than rent. More than everything else.
In Italy, staff costs make up on average between 32% and 37% of revenue (FIPE 2026 data). That means for every €100 taken, between €32 and €37 goes to staff.
In this guide we explain, in plain words, how to calculate staff costs, what they should be for your type of venue, and what to do if they’re too high — and how restaurant staff management and an AI shift planner help you keep them in line with real demand. The worked examples use Italian rates; contribution rates and contract rules differ by country, so check yours with your payroll adviser.
Staff costs in a restaurant should be between 25% and 35% of revenue. This varies slightly depending on the type of venue you run. The real cost of an employee isn’t just the salary: you also have to add employer social security contributions (around 30% extra in Italy), end-of-service provisions and other costs. In Italy, a server who takes home €1,400 net really costs you about €2,100–2,300 a month. If you don’t start from this number, you’re calculating your staff costs wrong.
What does “staff cost” mean in a restaurant?
Let’s start with the basics, in plain words.
Staff costs are all the money you spend paying the people who work in your restaurant. Servers, cooks, bartenders, dishwashers. Everyone.
It isn’t just the salary you see on the payslip. That’s only part of it. Other money leaves your pocket that many restaurant owners forget to count.
That’s why, when talking about staff costs in hospitality, you always need to look at the full figure, not just the net salary.
The terms to know
- Net salary: the money the employee actually receives, every month.
- Gross salary: the employee’s net salary plus taxes. It’s a higher number than the net salary.
- Social security contributions (INPS in Italy): as the employer, you pay extra money to the national pension and worker protection scheme.
- End-of-service allowance (TFR in Italy): money you set aside every month and pay to the employee when they stop working for you.
Why staff costs are hard to keep under control
With food, it’s easy to notice when something’s wrong. The price of fish goes up. You see it on the invoice straight away. You react immediately.
With staff costs, things are different. Problems grow slowly, without being noticed.
An hour of overtime here. A shift with too many people there. A sick employee you have to replace. Each thing, on its own, looks small. But all together, month after month, it eats into your earnings. And no alarm goes off to warn you.
Many restaurants take more money than the year before, but do they really earn more? Not necessarily. The reason is simple: staff costs, which in Italy average between 32% and 37% of revenue, can absorb almost all the extra takings. Selling more doesn’t mean earning more if you don’t keep track of what you spend on staff.
| Figure | What it means |
|---|---|
| 32–37% | The share of revenue that goes to staff, on average, in Italian restaurants (FIPE 2026) |
| 2× | An employee costs you almost twice the net salary they see on their payslip |
| 60–65% | The maximum for food and staff together (called prime cost) |
How to calculate staff costs: the formula step by step
Now to the most important point: how do you calculate the real cost of staff in a restaurant?
Many owners only look at gross salaries. That’s a common mistake. The real number is higher. If you ignore it, you think you’re spending less than you really are.
Here are all the items to add up to calculate restaurant staff costs correctly (rates shown are Italian examples):
- Gross salaries: the starting point, before taxes.
- Social security contributions: money that you, as the employer, pay on top. In Italy (INPS), around 30% of the gross salary.
- Workplace accident insurance: a small insurance premium against injuries (INAIL in Italy).
- End-of-service allowance: money set aside every month; in Italy (TFR), around 7.67% of the gross salary.
- Overtime and bonuses: overtime, night work, work on public holidays.
Restaurant staff cost formula: Total cost = Gross salaries + Social security contributions + Accident insurance + End-of-service allowance + Overtime
A simple example with Italian rates: a restaurant with 5 employees. Their combined gross salaries are €8,000 a month.
- + Social security contributions (around 30% of gross) → €2,400
- + Accident insurance (around 1.5%) → €120
- + End-of-service allowance (7.67% of gross) → €614
- + Overtime (around 8% extra) → €640
Real total cost per month → about €11,774. Not €8,000. Almost €4,000 more than many people think.
If the restaurant turns over €38,000 a month, staff costs come to 31% of revenue. A good number.
Restaurant staff cost percentage formula: Staff cost % = (Total staff cost ÷ Revenue for the period) × 100
Do this calculation every week, not just at month end. A mistake made in one week can be fixed straight away. A mistake made over a whole month can’t. It’s already done.
One more tip: don’t forget absenteeism. If an employee is off sick for a month, they still cost something, because you also have to pay whoever covers for them. Keep this cost separate: it tells you how much an unstable team is costing you.
Want to see your staff’s hourly cost in real time, without doing the maths by hand?
With Kappino’s staff module, you can instantly see the monthly cost, the hourly cost and the hours worked of every employee. Try it free for 14 days.
What an employee costs per hour: simple examples by role
Many restaurant owners don’t know the real hourly cost of their staff. They guess. But guessing isn’t enough when you have to decide whether to put three or four servers on for lunch.
Below are three simple examples, based on Italy’s national collective agreement for tourism and hospitality (CCNL Turismo e Pubblici Esercizi), updated to 2026.
Cook
- Gross monthly salary: ≈ €1,750
- Social security contributions (30%): ≈ €525
- End-of-service allowance (7.67%): ≈ €134
- Accident insurance and other costs: ≈ €60
- Real monthly cost to you: ≈ €2,469
- Real hourly cost (÷173 hours): ≈ €14.30/hour
Server
- Gross monthly salary: ≈ €1,620
- Social security contributions (30%): ≈ €486
- End-of-service allowance (7.67%): ≈ €124
- Accident insurance and other costs: ≈ €55
- Real monthly cost to you: ≈ €2,285
- Real hourly cost (÷173 hours): ≈ €13.20/hour
Dishwasher / kitchen assistant
- Gross monthly salary: ≈ €1,420
- Social security contributions (30%): ≈ €426
- End-of-service allowance (7.67%): ≈ €109
- Accident insurance and other costs: ≈ €48
- Real monthly cost to you: ≈ €2,003
- Real hourly cost (÷173 hours): ≈ €11.60/hour
These numbers tell you something very clear: every hour of work that isn’t really needed is real money you’re losing.
A server doing an hour of overtime doesn’t cost you 8 or 9 euros. They cost you 13 or 14 euros, sometimes more, because under the Italian CCNL overtime carries a 25–50% premium. That’s why it’s important to plan shifts around the number of customers you really expect, not just out of habit.
What should staff cost for your type of venue?
We often hear “30% maximum”. It’s an easy number to remember, but it’s too general. The right number varies with the type of venue, the menu prices and the kind of service you offer.
Below are typical ranges for each type of venue:
| Type of venue | Ideal staff cost | Why |
|---|---|---|
| Bar / café | 20–28% | Fast service, few servers, lots of customers moving quickly |
| Pizzeria / simple trattoria | 25–32% | Set menu, easy-to-predict shifts, lots of covers |
| Restaurant with table service | 28–35% | Full table service, more staff per customer |
| Luxury / fine dining restaurant | 30–38% | Lots of staff for few customers, long service, sommelier |
| Fast food / takeaway | 22–30% | Lots of customers, little space, short and intense shifts |
| Any venue above 40% | ⚠ Danger | Profits are close to zero or negative. You need to act now. |
Prime cost: the number that links food and staff
There’s a number that experienced restaurant owners look at every week. It’s called prime cost. Many owners have never even heard of it.
It’s simple: prime cost = food cost % + staff cost %.
The right number is 60–65% at most. If your food cost is 32% and your staff cost is 31%, your prime cost is 63%. That’s fine. You’ll have 37% left for rent, bills, marketing and your profit.
If prime cost rises above 68–70%, your real profit drops close to zero. You can have a full restaurant every evening and still earn nothing, because the two biggest expenses swallow everything. This often happens when you don’t track your costs every week, without even noticing.
How to calculate your prime cost easily every week: take your weekly revenue, for example €28,000. Work out the food cost (for example €8,960, or 32%) and the real staff cost (for example €8,120, or 29%). Add the two percentages: 61%. You’re on the right track. If you go above 65%, look at staff costs first: it’s the expense you can change fastest.
Running more than one venue? Compare the numbers across locations
With Kappino you can see staff costs, revenue and prime cost for every location from a single dashboard, every week and not just at month end.
The most common mistakes when calculating staff costs
1. Counting only the net salary
The net salary is what the employee sees. For you, the real cost is gross pay plus contributions plus the end-of-service allowance. If you use only the net figure, you underestimate the cost by 40–50%.
2. Not counting overtime
Overtime can look like a small amount. But five employees each doing four extra hours a week is twenty hours: at around €13 an hour, that’s more than €250 a week. Over a year, more than €13,000 you hadn’t planned for.
3. Ignoring night and holiday shifts
In Italy, the CCNL sets a 15–30% premium for night work and public holidays. A server who works every Saturday night and Sunday costs more than one on regular shifts.
4. Calculating the cost only at month end
By month end, the damage is done. If you calculate staff costs every week, you can make immediate corrections, for example by cutting overtime the following week.
5. Not counting the cost of sick leave
A sick employee costs you twice: in Italy INPS only reimburses part of it, and you also pay whoever covers for them. Keep this cost separate: the number you find is often surprising.
6. Using the same budget all year
Restaurant work changes with the seasons. In summer you have more customers but also more seasonal staff. In winter you earn less but keep the same permanent employees. Staff costs need to be planned month by month, based on expected revenue.
What to do if staff costs are too high
Above 35%? Before letting anyone go, which should always be the last resort, follow these steps in order.
01. Look at where most of the overtime is
Almost always, the problem isn’t the permanent staff but unplanned overtime. Look at who did the most overtime in the last four weeks and why. Too few people on shift? Sick leave handled badly? Unexpected extra customers? The cause will tell you the solution.
02. Check shifts against real customer numbers
The most common problem isn’t having too many people. It’s having them at the wrong time. Three servers at lunch with eight tables occupied, and two servers in the evening with the restaurant full. Put staff where they’re really needed. Sales data for every hour of the day tells you exactly when you need more staff and when you need fewer.
03. Check how much you took that week
Sometimes the problem isn’t the spending but lower takings than usual. A week of bad weather, a cancelled event or an awkward public holiday can lower takings and push up the staff cost percentage. Before cutting hours, work out whether it’s just an odd week or a real problem.
04. Help each employee be more productive, instead of letting people go
A good number to watch is revenue per employee over the year. If it’s low, the problem isn’t how many people you have but how you use them. For example, training servers to suggest extra dishes to customers can increase revenue without spending a single euro more.
05. If you have more than one restaurant, compare the numbers across locations
If you run several locations, comparing staff costs between them gives valuable insight. If one location is at 29% and the other at 41%, you know straight away where to look. The location that’s doing well often shows you what works. Anyone running several restaurants or outlets needs to see this data every week, not just every month.
How to keep track of staff costs every week
The difference between a restaurant that keeps staff costs under control and one that only finds out at month end isn’t how talented the owner is. It’s having a simple method that repeats every week.
- Every Monday morning: work out the week’s revenue and the real staff cost (gross, plus contributions, plus overtime). Calculate the percentage. Compare it with the right number for your business.
- If you’re above the right number: find the cause before Tuesday. Overtime? Sick leave? Low takings? Don’t wait for the following week.
- Before planning the weekly shifts: check bookings and how many customers you expect in each time slot. Put staff where they’re really needed, not the same as last week.
- At month end: calculate prime cost (food plus staff). If it’s above 65%, decide which of the two costs to correct first the following month.
Doing all of this by hand takes time, and often it isn’t done as often as it should be. Owners who track costs every day, together with the rest of the restaurant’s management, get much more stable results than those who only do it after something has already gone wrong.
The most important tip: the real problem in managing staff costs isn’t technical. It’s a way of thinking. You need to stop planning shifts around “how many people do I have available?” and start with “how many customers do I expect in that time slot?”. Only then will staff stop being a fixed cost and become something that adapts to real customers.
Conclusion: staff costs are controlled with the right numbers
Staff costs in hospitality aren’t controlled by cutting people at random. They’re controlled by having the right numbers: the real cost of each role, the weekly percentage, the prime cost. And by acting before the problem becomes serious.
Start here: work out the real cost of each employee using the full formula (gross plus contributions plus end-of-service allowance). Then calculate the percentage of your revenue every week. Compare it with the right numbers for your type of business. If you’re in the right range, great, you’re managing well. If you’re above it, you now have the right number to start adjusting from.
Restaurants that grow in a healthy way aren’t the ones that spend least on staff. They’re the ones that know exactly how much they spend, why they spend it, and how to improve without compromising service to customers.
See how Kappino can help you manage your restaurant staff
See the monthly cost, the hourly cost and the hours worked of every employee, together with POS, orders, inventory, customers and analytics, all in one platform.
Frequently asked questions about restaurant staff costs
The right number is between €25 and €35 for every €100 taken. It varies with the type of venue: bar 20–28%, pizzeria or trattoria 25–32%, restaurant with table service 28–35%, high-end restaurant up to 38%. In Italy, staff costs average between 32% and 37% of revenue (FIPE 2026 report). If you’re consistently above 40%, there’s a real problem to solve.
You add up the gross salary, employer social security contributions (around 30% of gross in Italy), accident insurance and the end-of-service allowance (7.67% of gross in Italy), plus any overtime and night or holiday premiums. The total is often 40–50% higher than the net salary the employee sees on their payslip.
Prime cost is the food cost percentage plus the staff cost percentage of revenue. The ideal value is between 60% and 65%. If it goes above 68–70%, the profit margin drops close to zero, even with a full restaurant.
Before letting anyone go, check where the overtime is concentrated, compare shifts with real customer numbers, check whether it was a week of low takings, work on each employee’s productivity and, if you run several locations, compare the numbers across them to see where to act first.
In Italy, about €13.20 an hour, taking into account gross salary, INPS contributions, TFR and INAIL, under the national collective agreement for tourism and hospitality updated to 2026.
