Excel guide · 5 min read
How to calculate labor cost percentage in Excel
=SUMIFS($F$2:$F$13,$A$2:$A$13,H2)*(1+$O$2)/I2. Monday's $345 of wages plus 12% on-cost against $1,480 of sales is 26.1%.Sample data
Every result on this page was calculated from this sheet by the same spreadsheet engine the Cellwise app uses.
| A | B | C | D | E | F | G | H | I | J | K | L | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Date | Employee | Scheduled hrs | Actual hrs | Hourly rate | Wages | Date | Sales | Labor cost | Labor % | Sales per labor hour | |
| 2 | Nov 2, 2026 | Maya | 6 | 6.5 | 17 | 110.5 | Nov 2, 2026 | 1480 | 386.4 | 0.26108108108 | 75.897435897 | |
| 3 | Nov 2, 2026 | Luis | 8 | 8 | 19 | 152 | Nov 3, 2026 | 1395 | 368.76 | 0.26434408602 | 73.421052632 | |
| 4 | Nov 2, 2026 | Priya | 5 | 5 | 16.5 | 82.5 | Nov 4, 2026 | 1620 | 399.84 | 0.24681481481 | 81 | |
| 5 | Nov 3, 2026 | Maya | 6 | 6 | 17 | 102 | Nov 5, 2026 | 1710 | 413.28 | 0.24168421053 | 81.428571429 | |
| 6 | Nov 3, 2026 | Jon | 8 | 8.5 | 18 | 153 | ||||||
| 7 | Nov 3, 2026 | Priya | 5 | 4.5 | 16.5 | 74.25 | ||||||
| 8 | Nov 4, 2026 | Luis | 8 | 8 | 19 | 152 | ||||||
| 9 | Nov 4, 2026 | Jon | 6 | 6.5 | 18 | 117 | ||||||
| 10 | Nov 4, 2026 | Ana | 5 | 5.5 | 16 | 88 | ||||||
| 11 | Nov 5, 2026 | Maya | 6 | 6 | 17 | 102 | ||||||
| 12 | Nov 5, 2026 | Luis | 8 | 9 | 19 | 171 | ||||||
| 13 | Nov 5, 2026 | Ana | 6 | 6 | 16 | 96 |
Download this sheet as an Excel practice file (.xlsx)
Step 1: A shift list with hours and rates
Labor cost % is only as good as the labor number, so start from the shifts, not a guess. The sheet is a small cafe's first four days of the week: one row per shift with the date, the person, the hours they were scheduled, the hours they actually worked (from the timeclock or timesheet) and their hourly rate.
Wages for each shift are actual hours x rate: =D2*E2 in F2, copied down. Maya worked 6.5 hours at $17, so her Monday shift cost $110.50 in wages.
Keep one row per shift rather than one row per person per week. It costs nothing extra to type and it lets you add up labor by day, by person or by role with the same SUMIFS.
Result: 110.5 shows as $110.50 with Currency format
110.5: Maya's Monday wages, 6.5 hours at $17.
Step 2: Labor cost per day, including what you pay on top of wages
Wages alone understate what staff cost you. Most employers also pay things on top, such as payroll taxes, insurance or benefits, and the total varies by country, state and business. Work out your own on-cost as a % of wages (your payroll provider or accountant can tell you) and put it in O2. The 12% here is only a sample.
Labor cost for a day is the sum of that day's wages, times 1 plus the on-cost: =SUMIFS($F$2:$F$13,$A$2:$A$13,H2)*(1+$O$2). Monday's wages add to $345, so labor cost is $386.40.
Staff who aren't on the shift list still count. If a salaried manager works all week, add their pay for the same period (for one day, weekly pay / the days the cafe is open) or the % will look better than it is.
Result: 386.4 shows as $386.40 with Currency format
About 386.40: Monday's labor cost, $345 of wages plus 12%.
Step 3: Labor % for each day and the week
Divide the day's labor cost by the day's sales: =J2/I2, formatted as a percentage. Monday is 26.1%, Tuesday 26.4%, Wednesday 24.7% and Thursday 24.2%.
For the week so far, divide the total labor by the total sales: =SUM(J2:J5)/SUM(I2:I5) gives 25.3%. Don't average the four daily percentages. An average treats a quiet Tuesday the same as a busy Saturday, while the total weights each day by its sales.
Use sales before tax and tips, the same figure you'd use for food cost %. Whatever you choose, use it every week so the numbers compare.
Result: 0.25274456084 shows as 25.3% with Percent format
About 0.2527: labor was 25.3% of sales from Monday to Thursday.
Scheduled vs actual labor
The schedule is a plan; the timeclock is what you pay. Compare the two to see where the hours went. Scheduled cost is scheduled hours x rate: =SUMPRODUCT(C2:C13,E2:E13)*(1+O2) is $1,517.60 for 77 scheduled hours. Actual labor, =SUM(F2:F13)*(1+O2), is $1,568.28 for 79.5 hours.
That's 2.5 hours and about $51 over plan in four days, and Thursday accounts for an extra hour of it: Luis stayed until close. Add a column with =D2-C2 to see each shift's difference, and filter for anything above 0.5 hours.
Scheduled labor % is a good check before the week starts: $1,517.60 against the same sales would have been 24.5%.
Result: 50.68 shows as $50.68 with Currency format
About 50.68: actual labor cost was about $51 above the schedule.
Sales per labor hour
Labor % moves when your wage rates change, even if nobody worked an extra minute. Sales per labor hour (SPLH) uses hours instead of dollars, so it shows how busy each hour of staff time was. =I2/SUMIFS($D$2:$D$13,$A$2:$A$13,H2) divides Monday's $1,480 by 19.5 hours: $75.90 per labor hour.
Tuesday was the weakest at $73.42 and Thursday the strongest at $81.43. For the week, =SUM(I2:I5)/SUM(D2:D13) gives $78.05. If one day is always lower, that's the shift to schedule tighter.
Use actual hours, not scheduled, and include every hourly person who was on the clock that day.
Result: 75.897435897 shows as $75.90 with Currency format
About 75.90: Monday's sales per labor hour.
Turn a target % into a labor budget
If you have a target labor %, put it in O3 (30% here is a sample, not a benchmark) and the forecast sales for a day in O4. The labor budget is forecast sales x target: $2,400 x 30% = $720 for Friday.
To turn dollars into hours, divide by your average loaded hourly cost: total wages / total hours x (1 + on-cost). =O4*O3/(SUM(F2:F13)/SUM(D2:D13)*(1+O2)) gives about 36.5 hours to schedule for Friday.
A target is a planning number, not a rule. A slow day needs a minimum crew no matter what the % says, so check the hours against the people you actually need on the floor.
Result: 36.498584436 shows as 36.5 with Number format
About 36.5: the hours a $720 labor budget buys at the average loaded rate.
Common mistakes
Using wages only
Add your own on-cost % for what you pay on top of wages, and include salaried staff for the same period.
Averaging daily percentages for the week
Divide total labor by total sales: =SUM(labor)/SUM(sales).
Mixing scheduled hours with actual sales
Use actual hours from the timeclock for labor %, and keep scheduled hours for planning and the scheduled-vs-actual check.
Comparing a week with tips in sales to one without
Pick one definition of sales, usually before tax and tips, and use it every period.
FAQ
What is the formula for labor cost percentage?
Labor cost % = total labor cost / total sales for the same period. In Excel: =labor/sales, formatted as a percentage.
Should labor cost include payroll taxes and benefits?
For a complete number, yes: include what you pay on top of wages. Put your own on-cost % in a cell and multiply wages by 1 plus that %. What that % is depends on where you are and what you offer, so get it from your payroll provider or accountant.
How do I calculate labor cost percentage per day in Excel?
Add up each day's wages with SUMIFS on the date, apply your on-cost, then divide by that day's sales: =SUMIFS(wages,dates,day)*(1+oncost)/sales.
What is sales per labor hour?
Sales divided by the hours worked in the same period. It shows how productive staff time was, and unlike labor %, it doesn't change when pay rates change.
Functions used
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