US Restaurant Overtime Cost Calculator (2026): Turn OT Hours Into Pricing Decisions

If your team is hitting overtime every week, menu margin is probably telling you the truth before your P&L does.

Operators usually notice OT as a payroll annoyance. In practice, it is a pricing input. If you ignore it, profitable items can turn marginal without any recipe change.

This guide gives you a weekly OT calculator and a decision rule: fix schedule first, then reprice only where needed.

Quick Summary

• Calculate OT premium dollars weekly, not monthly
• Track overtime by station and daypart
• Convert OT dollars into per-cover and per-item impact
• Fix repeat scheduling leaks before broad menu increases
• Use selective pricing only after operational fixes

2026 Context: Why OT Hits Harder

The Overtime Math (Use Both Numbers)

Full OT cost = OT hours x Base hourly rate x 1.5
OT premium cost = OT hours x Base hourly rate x 0.5

For pricing decisions, OT premium is usually the cleaner signal because base wages were already in plan.

Then convert into operating impact:

OT premium per cover = OT premium cost / Weekly covers
OT premium per target item = OT premium cost / Weekly units of target items

Example: Weekly OT Leak

Assume:

• OT hours this week: 42
• Base hourly rate: $19
• Weekly covers: 1,700
• Units sold of top 8 menu items: 2,450

OT premium cost = 42 x 19 x 0.5 = $399
Full OT payroll on those hours = 42 x 19 x 1.5 = $1,197
OT premium per cover = 399 / 1,700 = $0.23
OT premium per target item = 399 / 2,450 = $0.16

Now you have a measurable recovery target.

Fix First: OT Triage by Cause

Common repeat causes:

1. Prep starts too late for demand curve
2. Close-down tasks spill into overtime daily
3. One station owns too many SKUs
4. No-show coverage relies on expensive same-day OT

If the same cause appears for 2+ weeks, treat it as a system issue, not staffing luck.

15-Minute Weekly OT Review

• Pull OT hours by station (prep, line, close)
• Separate planned OT vs unplanned OT
• Compute OT premium dollars and per-cover impact
• Flag top 3 causes
• Apply one schedule/process fix this week
• Reprice only SKUs still below contribution floor after fix

What Owners Are Saying in Community Threads

Owners discussing labor percentages and pricing pressure report the same operational tension:

• labor cost shares are rising,
• price increases feel necessary but risky,
• busy weeks can still feel cash-tight.

That is exactly why OT needs to be converted into unit economics, not handled as a vague overhead bucket.

FAQ

Should I calculate OT on gross sales?

No. Use net sales logic for margin calculations, then convert OT premium into per-cover or per-item impact.

If I cut overtime, can I avoid price changes?

Sometimes yes. Many stores recover meaningful margin by fixing repeat OT causes first.

Is all overtime bad?

No. Planned OT can be rational during high-margin demand windows. Unplanned OT is usually the leak.

How fast should I act on OT spikes?

Within one scheduling cycle. Waiting for month-end usually makes the fix more expensive.

KitchenCost helps you track labor-sensitive menu contribution and update price floors quickly when labor assumptions change.

Related Guides

• Restaurant Labor Cost Percentage Guide (US)
• US Restaurant Labor Cost Calculator
• US Restaurant Prime Cost Calculator
• US Menu Price Increase Calculator (2026)

Sources (checked on 2026-02-14)

• U.S. Department of Labor - Fact Sheet #2: Restaurants and Fast Food
• U.S. Department of Labor - Overtime Pay
• BLS CPI News Release (January 2026, published February 13, 2026)
• FRED/Census: Retail Sales, Food Services and Drinking Places (MRTSSM722USN)
• NFIB Press Release (February 11, 2026; January survey)
• Reddit r/restaurantowners: Average labor cost percentages discussion
• Reddit r/smallbusiness: “Is anyone surviving right now?”