Restaurant profit and loss statement: a plain-English guide

A restaurant profit and loss statement (P&L) lists your sales for a period, subtracts what you spent to earn them, and shows what is left. The lines that matter most are cost of goods sold and labor, which together make up prime cost. Read it every month, and track a quick version every day or week so you can act before the month is over.

What a restaurant P&L looks like

Most restaurant P&Ls follow the same order, from top to bottom:

1. Sales (food, drinks, catering, other).
2. Cost of goods sold (COGS), the food and drink you used.
3. Gross profit = sales minus COGS.
4. Labor, including wages, salaries, payroll taxes and benefits.
5. Prime cost = COGS plus labor.
6. Operating expenses, such as rent, utilities, card fees, supplies, repairs and marketing.
7. Operating profit = gross profit minus labor and operating expenses.
8. Below-the-line items such as interest and depreciation, then profit before tax.

Show each line as dollars and as a percentage of total sales. Percentages let you compare a slow February with a busy December.

The main lines, explained

Sales

Split sales by type: food, beverage, catering, and online or delivery. Use net sales, after discounts, comps and voids. Restaurant365 warns that using gross sales before voids, comps and discounts makes your cost percentages look better than they are.

Cost of goods sold

COGS is not just what you bought. It is what you used:

COGS = beginning inventory + purchases – ending inventory

That is why counting inventory at month end matters. Without a count, a big order on the 30th makes the month look worse and next month look better.

Labor

Include everything: hourly wages, salaried managers, overtime, payroll taxes and employer-paid benefits. Leaving out taxes and benefits makes labor look cheaper than it is.

Operating expenses

Group these the same way every month. Common lines:

• Rent and occupancy (rent, common area fees, property tax if you pay it)
• Utilities
• Card processing fees
• Delivery app commissions and online ordering fees
• Paper goods, cleaning and smallwares
• Repairs and maintenance
• Marketing
• Insurance
• Software, POS and phones
• Accounting, legal and admin

If delivery apps are a big line, see delivery app fees for restaurants.

Prime cost: the number to watch

Prime cost = COGS + total labor Prime cost % = prime cost ÷ total sales × 100

Prime cost is the biggest chunk of your spending, and it is the part you can change week to week. Restaurant365 says most full-service restaurants target a prime cost below 65% of sales, and quick-service and fast-casual restaurants often run closer to 60% or below.

Restaurant P&L benchmarks

Benchmarks are a starting point, not a grade. Your rent, menu and service style change what is normal for you.

Measure	Benchmark	Source
Median pre-tax income, full-service	2.8% of sales	National Restaurant Association, 2025 Operations Data Abstract
Median pre-tax income, limited-service	4.0% of sales	Same
Median labor (payroll and benefits), full-service	36.5% of sales (2024)	Same
Median labor, limited-service	31.7% of sales (2024)	Same
Median prime cost, limited-service	65 cents per sales dollar	Same
Prime cost target, full-service	Below 65% of sales	Restaurant365

The NRA’s 2025 abstract is based on data from more than 900 restaurant operators. The NRA also reported that full-service restaurants with a pre-tax profit had median labor of 34.2% of sales, while those with a loss had 42.9%. Labor control is often the difference between profit and loss.

For a longer view: in 2022, the NRA described a typical pre-pandemic restaurant where food and labor each took about 33 cents of every sales dollar, other costs about 29 cents, leaving roughly 5% pre-tax profit. In July 2026, the NRA said 42% of operators reported their restaurant was not profitable in 2025.

A worked example: one month

Here is a sample P&L for a restaurant with $100,000 in monthly sales. The numbers are an example built to match the benchmarks above, not real data.

Line	Amount	% of sales
Food sales	$85,000	85%
Beverage sales	$15,000	15%
Total sales	$100,000	100%
Cost of goods sold	$31,000	31%
Gross profit	$69,000	69%
Labor (wages, taxes, benefits)	$34,000	34%
Prime cost	$65,000	65%
Rent and occupancy	$9,000	9%
Utilities	$3,500	3.5%
Card processing	$2,800	2.8%
Delivery and online ordering fees	$2,500	2.5%
Supplies, paper and cleaning	$3,000	3%
Repairs and maintenance	$1,500	1.5%
Marketing	$2,000	2%
Insurance	$1,500	1.5%
Software and phones	$1,000	1%
Accounting and admin	$1,200	1.2%
Other	$1,000	1%
Total operating expenses	$29,000	29%
Operating profit	$6,000	6%
Interest and depreciation	$2,000	2%
Profit before tax	$4,000	4%

What this owner might do next:

• Food cost at 31% is in a normal range. Check the top 10 dishes for price creep. See menu pricing and food cost.
• Each 1% of sales saved is $1,000 a month. Cutting labor from 34% to 33% through better scheduling would raise profit by a quarter.
• Delivery fees at 2.5% could shrink if more guests order direct.

How to read your P&L in 10 minutes

You don’t need to be an accountant. Each month, go down the page in this order:

1. Total sales vs last month and the same month last year. Up or down, and why?
2. COGS %. Did it move more than a point? Check prices on your biggest purchases.
3. Labor %. Compare scheduled hours with sales. Look for overtime.
4. Prime cost %. Is it moving toward your target or away from it?
5. The three biggest operating expenses. Any surprises?
6. Profit before tax in dollars. Is it enough to pay you and save for repairs?

Write down one thing to change next month. One fix done well beats ten ideas on a list.

Daily vs monthly P&L

A monthly P&L is accurate but late. By the time you see a bad month, it is over.

A daily or weekly “flash” P&L is rough but fast. Track:

1. Sales from your POS.
2. Food purchases from invoices, or an estimated food cost percentage.
3. Labor from timesheets, with an estimate for payroll taxes.
4. Fixed costs spread per day. In the example above, $29,000 of monthly operating costs is about $967 a day over 30 days.

If daily sales minus food, labor and that $967 is negative on most Mondays, you know which day needs work. Our guide to how to increase restaurant sales has ideas for slow days.

Common P&L mistakes

• No month-end inventory count. COGS swings wildly and means nothing.
• Mixing personal and business costs. Keep them in separate accounts.
• Changing categories every month. You can’t compare months.
• Leaving out the owner’s labor. If you work the line, your time has a cost.
• Confusing profit with cash. Loan payments, equipment purchases and catering deposits affect cash differently than profit.
• Ignoring cash by person. Cash that is not counted and assigned at close is cash that can go missing.

For taxes, depreciation and how to book specific items, work with your accountant and check the official IRS guidance.

Monthly P&L checklist

• Inventory counted on the last day of the month.
• Sales are net of discounts, comps and voids.
• Labor includes payroll taxes and benefits.
• Every line shows dollars and percent of sales.
• Prime cost compared with last month and the same month last year.
• One action chosen for next month.

How WhatsTable helps

WhatsTable Money gives you a daily P&L, so you see the month taking shape instead of waiting for the books. It also shows cash by person, so you know who took the cash at each close. Purchasing helps the chef approve vendor orders before they are emailed, which keeps food spending in view. WhatsTable works with Clover POS, and card money goes to your own Clover account. Pricing is $0 a month plus 5–10% of sales through WhatsTable. Book a demo to see a daily P&L with your own numbers.