Most solo operators know their sales number but cannot answer one basic question: “What am I earning per hour after all business costs?” If that number is unclear, you can still look busy while your margin quietly collapses.
This guide gives you a practical US workflow: calculate owner hourly wage, test it against a hiring threshold, and use one short weekly routine to stay in control.
Quick Summary
ownerPay = netSales - allOperatingCostsExcludingOwnerPayownerHourlyRate = ownerPay / ownerHours- If
ownerHours = 0, set result to0to avoid invalid calculations. - Use state/local wage floors and local hiring rates as decision anchors.
Why This Matters in 2026 (US)
The BLS January 2026 CPI release was published on 2026-02-13.
When food-away-from-home and operating costs move on monthly vendor cycles, owner pay is usually the first number that gets squeezed if you do not track it directly.
At the same time, minimum wage floors in many US jurisdictions changed on 2026-01-01.
If your true owner hourly rate sits below the local legal entry wage, your current pricing and schedule model is not sustainable.
Core Formula (US Solo Operation)
Use pre-tax operating numbers from your POS/P&L period:
ownerPay = netSales - foodCost - payrollExcludingOwner - occupancy - utilities - otherOpEx
ownerHourlyRate = ownerPay / ownerHoursFor owner-operator decision-making, add a reserve check for taxes and benefits:
ownerTakeHomeReserve = ownerPay x reserveRate
ownerCashAfterReserve = ownerPay - ownerTakeHomeReserveWorked Example: Neighborhood Cafe in Phoenix
Assume one monthly close:
- Net sales:
$26,000 - Food and packaging:
$8,320 - Payroll (non-owner):
$3,250 - Occupancy:
$4,100 - Utilities and software:
$1,180 - Other operating costs:
$1,550 - Owner hours:
304
Step 1) Calculate owner pay:
ownerPay = 26,000 - 8,320 - 3,250 - 4,100 - 1,180 - 1,550
ownerPay = $7,600Step 2) Convert to hourly rate:
ownerHourlyRate = 7,600 / 304 = $25.00Step 3) Apply a 20% reserve check:
ownerCashAfterReserve = 7,600 x (1 - 0.20) = $6,080
effectiveCashHourly = 6,080 / 304 = $20.00If your local replacement rate for similar work is near $18-$21/hour, this model is workable.
If not, adjust menu mix or operating hours before adding more labor.
Local Execution: Manhattan vs Suburban Phoenix
| Context | Typical pressure point | First move |
|---|---|---|
| Manhattan quick-service lunch | High fixed occupancy, sharp peak windows | Trim low-margin SKUs at peak and protect speed on top 10 items |
| Suburban Phoenix all-day cafe | Long opening hours with weak shoulder demand | Compress slow dayparts and reassign prep to tighter batches |
20-Minute Weekly Owner Wage Loop
- Pull 7-day net sales and total owner hours.
- Recalculate
ownerHourlyRate. - Flag any week below your local target floor.
- Adjust one lever only: schedule, portion, or price.
- Recheck in the next weekly close.
Related Guides
KitchenCost helps solo operators run owner-pay, recipe cost, and weekly margin checks in one workflow.