With rising costs, staff shortages and pressure on margins, the payroll ratio has become a vital indicator for restaurateurs. It reveals how much of every euro of revenue is absorbed by salaries and charges, and whether that is compatible with a profitable model.
Good news: the calculation is simple and precise benchmarks exist for each concept. Here are the target levels, the calculation method and the levers to optimise your payroll without harming the guest experience.
What Is the Ideal Payroll Ratio for a Restaurant? (Calculation and Optimisation)
Reading time: ~12 min
1. Clearly define the restaurant payroll ratio
2. Which payroll ratio to aim for according to your type of restaurant
3. How to calculate your staff ratio in practice
4. Optimise the payroll ratio without sacrificing service
5. Complementary indicators to track alongside the payroll ratio
6. Quick FAQ on the payroll ratio in catering
7. Going further in managing your restaurant
1 Clearly define your restaurant’s payroll ratio
The payroll ratio expresses the weight of the total cost of your team relative to revenue excl. VAT.
Payroll: all staff-related costs over a given period, including in particular:
• gross salaries of all employees (permanent, fixed-term, extras, apprentices)
• employer contributions (in France, 40 to 45% of gross pay on average)
• bonuses, thirteenth-month pay, benefits in kind, paid leave allowances
Formula: Payroll ratio = (Total payroll ÷ Revenue excl. VAT) × 100.
A ratio of 35% means that €0.35 of every euro of revenue excl. VAT funds salaries and charges. This indicator, like food cost or rent, is used to compare your performance with benchmarks and to manage schedules and hiring on a numerical basis.
2 Which payroll ratio to aim for according to your type of restaurant
Professionals agree on a general range of 30 to 40% of revenue excl. VAT, to be nuanced according to the concept and the level of service.
• Quick service: 25 to 30%
• Bistro / café-restaurant: 28 to 33%
• Brasserie or traditional: 30 to 35%
• Broad traditional catering: 30 to 40%
• Fine dining / bistronomic: 35 to 40%
• Michelin-starred restaurant: 40 to 45%
Beyond 40% (outside fine dining), the warning zone calls for a review of organisation, menu, prices and costs.
How to interpret your ratio
Under 30%: excellent in quick service or a very productive concept, but may hide understaffing. 30 to 35%: the classic target for a well-run brasserie. 35 to 40%: acceptable if the average ticket and margin offset the extra cost. Over 40% (not fine dining): financial risk, to be corrected quickly.
3 How to calculate your staff ratio in practice
Step 1: list staff costs
List gross salaries, employer contributions, bonuses, tips included and allowances over the period concerned. If you lack detail, multiply gross salaries by 1.4 for a quick estimate.
Step 2: get the revenue excl. VAT
Use the revenue excl. VAT for the same period to keep the calculation consistent.
Step 3: apply the formula
Example: monthly revenue excl. VAT €30,000; payroll €10,500; ratio = (10,500 ÷ 30,000) × 100 = 35%. Calculate the ratio every month, then on a rolling 12-month basis to smooth out seasonality.
4 Optimise the payroll ratio without sacrificing service
Work on schedules in detail
Analyse revenue by day and time slot to match staffing to the real peaks and limit pointless overlaps. Also track revenue excl. VAT per hour worked to measure productivity.
Versatility and organisation
Training people who can cover several positions (a section waiter who also runs the bar, a commis handling the dishwashing, a manager covering the till) absorbs variations in activity without multiplying contracts.
Control overtime
Spot recurring overruns and, if possible, annualise working time or adapt contracts to seasonality to smooth out payroll.
Review the offer and processes
Cut a menu that is too broad, optimise recipes and prep, digitalise the menu to limit repetitive explanations or pointless trips by servers and, if your ratio stays high, adjust prices to reflect the level of service.
5 Complementary indicators to track alongside the payroll ratio
Hourly productivity
Formula: Hourly productivity = Revenue excl. VAT ÷ Total hours worked. It reveals how efficient your organisation is over the months.
Food cost and gross margin
Target food cost: 25 to 35% of revenue excl. VAT; overall gross margin: 70 to 75%. A slightly high payroll can be tolerated if these benchmarks are met.
Rent relative to revenue
Ideally under 10% of revenue excl. VAT. Heavy rent reduces room for manoeuvre on payroll; the organisation must then be even more efficient.
6 Quick FAQ on the payroll ratio in catering
What benchmark for a brasserie?
Aim for a ratio of 30 to 35% of revenue excl. VAT, to adjust according to the menu, opening hours and service.
My ratio is 42% and I am not fine dining: what should I do?
Check whether it is a one-off situation. If it lasts, analyse schedules, overtime, brigade size, menu and prices to restore balance without harming the guest experience.
How often should you calculate the ratio?
Monthly to react quickly, plus rolling 12-month tracking to smooth out seasonality.
Should the owner be included?
Yes, ideally as a real or notional salary so as to reflect the restaurant’s economic reality.
Going further in managing your restaurant
By combining the payroll ratio, hourly productivity, food cost and the rent to revenue ratio, you have a complete dashboard to decide when to hire, organise your schedules and set your prices.
Digital tools can also support your profitability. Our solution, for example, lets you digitalise your menu without handling ordering or payment, so as not to complicate service.
To find out more, visit Appero.
