Estimate total labor expense, labor cost percentage, and labor cost per order for a food delivery period using paid hours, hourly pay, payroll burden, revenue, and volume. Use matching dates and consistent definitions so the comparison is meaningful.
Total labor cost = paid hours × hourly wage × (1 + payroll burden ÷ 100). Labor cost % = total labor cost ÷ net sales × 100.
The main result includes base wages plus the payroll burden entered. The percentage and per-order figures make periods of different sizes easier to compare.
Use net sales after discounts and refunds, and include all paid time for the same period.
With 320 paid hours at $18, a 12% burden, $30,000 in net sales, and 2,000 orders, base wages are $5,760 and total labor cost is $6,451.20. That is 21.50% of sales, $3.23 per order, and 9.60 labor minutes per order.
Include manager hours when they support the measured operation; if a manager covers several operations, allocate only the relevant share.
Enter employer payroll taxes and benefits in the burden rate. Include employer-paid tips only if they are recorded as labor expense in your accounts.
Use a weighted average hourly wage or include overtime premiums when calculating the average rate.
Mismatched periods distort labor cost percentage and can make a busy or quiet period look misleading.
No. A positive volume is required for per-order results; use a complete operating period with recorded volume.
| Input | Purpose |
|---|---|
| Paid labor hours | All regular, overtime, prep, and cleanup hours |
| Payroll burden | Employer-paid costs expressed as a wage percentage |
| Net sales | Sales for the matching labor period |