How to Calculate Your Restaurant's Prime Cost in Ireland

When margins are tight and guests are increasingly value-conscious, keeping a close eye on your restaurant’s prime cost is essential.

Prime cost — the sum of your cost of goods sold (COGS) and labour costs — gives you a clear picture of how efficiently your restaurant is running day to day.

Use this guide to understand the prime cost formula, learn how to apply it, and find tools to help streamline your operations.

What Is Prime Cost in a Restaurant?

Prime cost = Total COGS + Total Labour Costs

These two elements make up the largest share of your controllable costs — meaning they’re the parts of your business where you can make direct decisions that impact profitability. COGS includes food, beverages, and packaging. Labour costs include salaries, wages, payroll tax, benefits, and insurance.

In Ireland, operators report spending 15% of their budget on labour and 10% on food tech to control prime cost and improve operational visibility.

Why Prime Cost Matters in Ireland

According to the Toast Voice of the Restaurant Industry Ireland Report, handling business finances and staff scheduling are two of the biggest challenges for Irish operators.

When you make it a habit to crunch those prime cost numbers regularly, a few things start to happen:

• You get a real sense of how your restaurant is actually doing - not just the busy nights that feel great, but the full picture. 

• You'll catch problems while they're still small, like when your food costs creep up or you're overstaffed on quiet Tuesdays, before they eat into your profits. 

• And when it comes time to make changes - whether that's tweaking portion sizes, reworking your menu, or adjusting your roster - you'll know you're making the right call because you've got the data to back it up.

Irish Consumers Are Watching Prices Closely

According to the Toast Consumer Preferences Survey 2025, 86% of Irish consumers feel that dining out is becoming too expensive, and 48% say they are very likely to avoid restaurants they perceive as overpriced. This makes strategic pricing and cost control more important than ever.

Even small cost savings per plate can add up to large improvements in your profit margins — and allow you to hold prices steady, which improves guest trust.

How to Calculate Your Prime Cost

To calculate your prime cost:

1. Add up all food, drink, and packaging costs for the month (COGS)

2. Add up wages, taxes, staff meals, and benefits (Labour)

3. Total both together = Prime Cost

Example:

• COGS = €20,000

• Labour = €15,000

• Prime Cost = €35,000

If your monthly revenue is €60,000:

Prime Cost % = (€35,000 / €60,000) × 100 = 58%

Industry benchmarks suggest aiming for 60% or less. If you can get closer to 55%, you’ll increase your margin significantly without raising prices.

5 Ways to Lower Prime Cost Without Hurting Quality

1. Track Prime Cost Monthly

Avoid surprises — check your COGS and labour figures each month and compare against your targets. Use automated invoice management tools and EPOS integrations to reduce admin time.

2. Optimise Inventory & Waste

Reduce spoilage by improving ordering and tracking. Many Toast customers use POS-integrated tools to understand usage and shelf life.

Pro tip: Benchmark your ingredient costs weekly using supplier comparison data.

3. Apply Menu Engineering

Identify your most profitable and popular dishes. Remove underperformers or redesign them using more cost-efficient ingredients.

4. Review Staffing Models

Use digital scheduling tools to match shifts to actual demand. Many Irish operators are investing in recruiting and shift planning software to reduce costs and improve retention.

5. Use Your POS to Its Full Potential

Your point of sale system should offer detailed sales, labour, and product mix reports. Toast’s all-in-one POS helps Irish restaurants track real-time costs, streamline admin, and boost profit margins.

Case Study: BANG Restaurant, Dublin

By switching to Toast, BANG saved up to 7 hours a week on back-office admin and improved cost visibility across shifts.

What Guests in Ireland Expect

According to The Toast Consumer Preferences Survey 2025, in which 200 Irish diners were surveyed about restaurant pricing and value:

• 47% of Irish consumers said price is a major influence on restaurant choice

• 40% prefer fixed-price menus, and many are willing to pay more for local or sustainable options

Look, smart pricing isn't about racing to the bottom with the cheapest options. It's about being upfront with your customers and making sure what you charge actually makes sense to them.

Final Thoughts

Your prime cost tells a story about your restaurant that goes way beyond just numbers on a spreadsheet. It shows you how healthy your business really is, where you're wasting money, and what kind of future you're building.

Irish diners today are sharper than ever about value - they want to know they're getting their money's worth. When you keep your prime cost in check, you can offer fair prices, provide clarity on what supplies really cost, and still make enough to keep the lights on.