• Adam Diltz

    Hello, I really love this site. My question is with labor cost. My bosses want a 35% labor cost which is doable when sales are high and it is busy, it’s almost impossible in slower months with how the kitchen is set up. The owners are cool and since the numbers have never been lower since I took over, they don’t come down on me when it is high, but one thing I think is wrong is if my line cook takes a vacation and gets paid for it, it still calculated as paying for labor that period. Same with bonuses. If I get a bonus because of my numbers at the end of the year, it goes towards the labor cost for that period. (we do weekly reports) I think this is kind of ridiculous, am I wrong?, I think it should be on a separate line for perks like insurance or something? What are your thoughts?

    • @adamdiltz It is common for companies to include things like vacations, funeral leave, PTO time, bonuses, etc in the cost of labor. But you are correct that they will also usually include it as a separate line item under the labor cost section (in the picture at the top of the article I suspect they included these as part of the “Other pay expenses” or “Total Taxes and Other Benes” line)

      What I suggest is backing these costs out of your numbers and at your P&L tell them what your numbers would have been w/o these unusual expenses. Either write the numbers on the paper copy, or if you have access to the file then save it as a copy and make the notations there. Give a copy to the others in the meeting.

      I do this all the time w/ unexpected expenses. It helps show everyone how consistent or inconsistent the raw numbers are w/o the influence of additional costs.

      • Adam Diltz

        Oh yeah, that’s a great way to do it. Thank you so much

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