UK Restaurant Prime Cost Calculator (2026): Food + Labour in One Number

Prime cost is the most practical control number in restaurant operations. It combines the two costs that move margin fastest: food and labour. If you only monitor food cost, you miss the full picture.

Quick Summary

• Prime cost = food cost + labour cost
• Use loaded labour cost, not base wage
• Recalculate weekly and compare trend, not a single week
• Reprice or redesign items when prime cost drifts 3+ points above target

Why This Matters in 2026 (UK)

For UK operators, payroll assumptions changed materially:

• The National Living Wage (21+) rises to £12.71 from 1 April 2026
• Employer Class 1 National Insurance rates are 15% for 2025-26 payroll rules
• Workplace pension auto-enrolment minimum is still 3% employer, 8% total

Inflation context is still relevant too. ONS reported CPIH at 3.6% and the restaurants and hotels class at 3.8% in December 2025. If menu prices stay flat while loaded labour rises, prime cost can deteriorate even when covers look stable.

Prime Cost Formula

Prime cost = Food cost + Labour cost

As a percent of sales:

Prime cost % = (Food cost + Labour cost) ÷ Total sales x 100

Build Loaded Labour Cost First

Before you calculate prime cost, convert headline wage into loaded labour cost:

Loaded hourly labour = Base hourly wage x (1 + Employer NI + Employer pension + other on-costs)

Example baseline from 2026 UK wage floor:

• Base wage: £12.71
• Employer NI: 15%
• Employer pension: 3%

Loaded hourly labour = 12.71 x (1 + 0.15 + 0.03)
= £15.00/hour (rounded)

Use your actual payroll setup for precision, but this gives an accurate planning baseline.

Worked Example (Weekly, UK Bistro)

• Weekly sales: £12,000
• Food cost: £3,600
• Labour cost (loaded): £3,900

Prime cost % = (3,600 + 3,900) ÷ 12,000 x 100
= 62.5%

At 62.5%, this shop is running above a common 60% control target. The next step is to check whether the drift comes from food portions, labour minutes, or both.

Local Scenario: London Lunch Site vs Leeds Neighbourhood Site

A practical UK mistake is forcing one prime-cost target across very different locations.

• London lunch-led site: higher wage pressure and shorter, intense service windows
• Leeds neighbourhood site: steadier labour deployment but higher delivery share in evenings

Both can run healthy margins, but not with the same labour-minute assumptions per cover. Set one control target for each operating model, then compare stores against the right baseline.

How to Use Prime Cost Operationally

• Track prime cost weekly for trend
• Split variance into food % vs labour %
• Reprice high-volume items that sit above target
• Tighten prep standards on dishes with high labour minutes

Do This Now

• Recalculate loaded labour cost by role
• Recheck top 20 item food cost with current invoices
• Calculate last 4 weeks of prime cost trend
• Flag any week above target by 3+ points
• Decide one pricing or labour action for the next menu cycle

Related Guides

• UK Restaurant Menu Pricing Guide
• UK Food Cost Calculator
• UK Restaurant Labour Cost Calculator
• UK Restaurant VAT Pricing Guide
• Prime Cost Guide

Sources (checked on 2026-02-12)

• GOV.UK — Minimum wage rates for 2026
• GOV.UK — Rates and thresholds for employers: 2025 to 2026
• GOV.UK — Workplace pensions: what you and your employer pay
• ONS — Consumer price inflation, UK: December 2025

Want This Done Automatically?

KitchenCost recalculates recipe costs, food cost %, and price targets as your ingredient prices change.

If you want a faster way to protect margin, try KitchenCost.