Prime cost
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Key takeaway: Prime cost is food and beverage cost plus labor cost, the biggest controllable slice of a restaurant's spending. Varastiq builds it from your counts and invoices (COGS), your sales (Toast or an uploaded sales report) and your recorded labor costs, so you see prime cost weekly instead of piecing it together after the month closes.
What it's worth: one point of food cost on $1M in food sales is $10,000 a year. Varastiq helps you review item usage in reporting and large count changes while counting.
What is prime cost?
Prime cost = cost of goods sold (food + beverage) + total labor cost (wages, payroll taxes and benefits). Prime cost % = prime cost ÷ total sales × 100. For context, the National Restaurant Association reported a median prime cost of 65% of sales for limited-service restaurants in 2024 (Restaurant Operations Data Abstract, 2025 edition; press release dated August 20, 2025). The full guide explains why one number can't fit every concept: restaurant prime cost guide.
Run your own numbers with the free prime cost calculator.
Why look at food and labor together?
Because they trade off. Buying pre-cut vegetables raises food cost and lowers prep labor. Adding a prep cook may cut waste. Looking at food cost alone can push you into a "saving" that costs more in hours. Prime cost puts both on one line.
How does Varastiq calculate prime cost?
- COGS from counts and invoices. Beginning inventory + purchases − ending inventory, for food and beverage. Counts come from the Stiq app. Purchases come from invoice capture.
- Sales from your POS. Toast connects read-only. Supported item-level sales reports can be imported; check your export format with us first.
- Record labor costs. Use available Toast time entries, import a supported wages CSV or enter wages manually. Include payroll taxes and benefits in your records when evaluating fully loaded prime cost.
- Prime cost, by week. Food %, beverage %, labor % and the total, side by side with prior weeks.
What do you do with a weekly prime cost?
- Catch drift while it's small. One point of prime cost on $40,000 of weekly sales is $400 a week, or $20,800 a year.
- See which side moved. If prime cost rose, was it food (go to variance flags) or labor (go to the schedule)?
- Plan the trade-offs. Test a price change with live plate costs before you make it.
Who is this for?
Owners and operators of independent restaurants and small groups who run their own P&L, and GMs whose bonus depends on prime cost.
When it's not the right fit: if you need a full general ledger, accounts payable and payroll processing in one system, look at an accounting-first restaurant suite. Varastiq reads recorded labor costs. It doesn't run payroll.
Frequently asked questions
What is included in prime cost?
Prime cost includes food cost, beverage cost and total labor cost, meaning wages plus payroll taxes and benefits.
Where does Varastiq get labor cost?
Use available Toast time entries, a supported wages CSV or manual wage entries. The current ADP connector exports time punches to ADP Time & Attendance; it does not import payroll costs.
Does Varastiq run payroll?
No. Payroll processing stays with your payroll provider. Varastiq uses the labor costs recorded in your workspace for prime cost.
What is a good prime cost percentage?
It depends on your concept, rent and prices. The National Restaurant Association reported a 65% median prime cost for limited-service restaurants in 2024. Track your own trend weekly and set a target that leaves room for occupancy and profit.
Which Varastiq plan includes prime cost?
There is one plan. Prime cost with recorded labor costs is included in Varastiq Pro, at $149 a month for the first location plus $99 a month for each additional location.
See prime cost every week
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