Prep Labor Cost Calculator
Enter the prep time and yield of a batch recipe to see what the labor really costs per portion — and whether buying it in beats making it.
The cost your recipe card is missing
Most recipe costing stops at the ingredients. You weigh the flour, price the butter, adjust for trim loss, and arrive at a cost per portion that feels precise to the cent. For anything you buy in ready to use, it is. For anything you make from scratch, it is incomplete. Somebody stood at a bench for ninety minutes turning those ingredients into a sellable product, and that hour and a half is every bit as real a cost as the butter.
The reason it gets left out is that prep labor is already paid. The cook is on the roster whether or not the stock goes on, so the hour feels free at the margin. That is the single most expensive assumption in kitchen costing. Payroll hours are finite and they are scheduled in advance. An hour spent breaking down chickens is an hour not spent on service mise en place, and if that displaced hour has to be bought back later — as an extra shift, a longer close, or overtime on a Saturday — it was never free at all.
Start with the loaded rate rather than the wage. A cook on $18 an hour does not cost you $18 an hour. Payroll taxes, workers' compensation, insurance, paid leave and any benefits add somewhere between 15% and 30% on top, depending on where you operate and how you staff. Costing prep at the bare wage understates every make-or-buy comparison you will ever run, and it understates it in the same direction every time: towards making it yourself.
Getting to a true cost per portion
Once you have a loaded rate, the rest is arithmetic. Convert prep minutes to hours, multiply by the loaded rate to get the labor in a batch, add the ingredients, and divide by the number of portions the batch actually produces.
Two things decide whether that number is honest. The first is what you count as prep time. Use hands-on minutes only. A stock that simmers for six hours does not cost you six hours of labor; it costs you the twenty minutes of attention at each end plus the energy. Counting unattended cooking as labor makes almost everything look like it should be bought in, which is just as wrong as ignoring labor entirely. The second is batch yield. Use the number of portions you genuinely get after cooking loss and portioning, not the theoretical figure on the recipe card. If you have not measured that, the yield percentage calculator will get you there before this one is worth running.
That last figure is the one worth writing on the recipe card next to the ingredient cost. It is what turns a recipe cost into something you can defend in a make-or-buy argument.
A worked comparison
Take a house sauce base. One batch takes 90 minutes of hands-on work, uses $96 of ingredients, and yields 40 portions. The cook doing it earns $18 an hour, and your burden is 22%, giving a loaded rate of $21.96. The labor in the batch is 1.5 hours × $21.96, or $32.94. A commercial equivalent costs $3.60 a portion delivered.
| Line | Make in-house | Buy in |
|---|---|---|
| Ingredients per batch | $96.00 | — |
| Prep labor, 90 min at $21.96 loaded | $32.94 | — |
| Purchase cost, 40 portions at $3.60 | — | $144.00 |
| Total batch cost | $128.94 | $144.00 |
| Cost per portion | $3.22 | $3.60 |
| Advantage per batch | $15.06 | — |
On ingredients alone the comparison read $2.40 against $3.60 — a 33% saving and an obvious decision that nobody would think twice about. With labor counted it is $3.22 against $3.60, a saving of about 10%. Still worth making, but thin enough that a wage rise, a slower cook, a smaller batch or a supplier volume discount flips it. That is the whole point of running the number: the answer is often the same, but you now know how much room you have before it changes.
Notice also what happens if you halve the batch. The ingredients halve, but the 90 minutes does not — setup, heating and cleanup are fixed regardless of volume. Prep at half scale might take 60 minutes, which pushes the labor per portion from $0.82 to $1.10 and eliminates most of the advantage. Batch size is usually the largest lever in the calculation and the one operators overlook.
Reading the labor share
The calculator returns labor as a percentage of the total make cost, and that ratio tells you how fragile the decision is. Under about 20%, the item is ingredient-driven; wage movements barely touch it and in-house production is low risk. Between 20% and 40%, labor is a genuine component and the comparison deserves an annual review. Above 40%, you are essentially running a small manufacturing operation inside a restaurant kitchen, and the case has to be made on quality or differentiation rather than cost.
Where the cost lands on your P&L matters too. Prep labor is not food cost — it sits in payroll, so a decision to make more in-house moves money from one line to the other without necessarily changing your prime cost. Operators chasing a food cost target sometimes bring items in-house, watch food cost fall two points, and never notice that labor cost percentage rose by the same amount. Prime cost is the only figure that sees both sides of the trade.
What the arithmetic does not capture
A cost per portion is a strong input to the decision, not the decision itself. Before you act on a narrow margin, weigh these:
- Opportunity cost of the hour. If your prep cook is idle at 10am, the hour is close to free. If they are already three tasks behind by service, the hour has to come from somewhere and the real cost is whatever gets dropped.
- Consistency. A bought-in product is identical every week. A house product varies with whoever made it, and that variance shows up as guest complaints and remakes long before it shows up in a cost figure.
- Equipment and energy. Long cooks, blast chilling and the gas or electricity behind them are real costs that this calculator excludes. On slow-cooked items they can be material.
- Storage and shelf life. House products often need more space and have shorter lives, which turns into spoilage if the batch is sized for convenience rather than demand.
- Skill dependency. If one person is the only one who can make it properly, you have built a single point of failure into your menu.
- What the guest is paying for. House-made bread, stocks and pastry can be part of why people choose you. That value is real even when the spreadsheet says buy.
Timing a prep task honestly
The weakest input in this calculation is almost always the prep time, because it is usually estimated from memory by the person who is best at the job. Estimates come in low by a wide margin. Fixing that costs three stopwatch sessions.
- Time it three times, on three different days. One observation encodes an unusually good or bad run as if it were normal.
- Time more than one cook. If your fastest and slowest differ by 40%, cost the realistic average, not the best case.
- Include setup and cleanup. Pulling stock, weighing, washing down and putting equipment away is part of the job and can be a third of the total on a short task.
- Time the batch size you actually run, then note how it scales. Fixed setup time is what makes small batches expensive.
- Do not time the head chef doing it. Cost it at the rate of whoever will realistically own the task once it is routine.
With honest times on your ten highest-volume prep items you can price the whole prep programme, and that feeds directly into how many hours you need on the roster. If you want to see the productivity side of the same question, sales per labor hour shows what each of those hours has to return.
Frequently asked questions
Should I use the individual cook's wage or a blended kitchen rate?
Use the rate of whoever will actually do the task week in and week out. A blended rate that includes chef and sous salaries inflates the cost of routine prep and pushes you towards buying in things you should be making.
Do I count unattended cooking time as prep labor?
No. Count hands-on minutes only. A six-hour braise might need twenty minutes of attention in total, and costing it as six labor hours would make almost every slow-cooked item look uneconomic. Energy cost is a separate consideration.
What labor burden percentage should I use?
Take total payroll cost for a period, divide by total gross wages paid, and subtract one. Most operations land between 15% and 30% once taxes, insurance, paid leave and benefits are included. If you have no figure at all, 20% is a reasonable placeholder until you calculate your own.
Does prep labor belong in food cost or labor cost?
Labor cost, on the P&L. This calculator combines the two only to compare against a bought-in price, which bundles the supplier's labor into its purchase price. Keep them separate in your accounts and watch prime cost to see the net effect of any switch.
Is a 5% saving worth making something in-house?
Rarely on cost grounds alone. A margin that thin disappears with one wage rise or one slow shift, and you are carrying the consistency and shelf-life risk for nothing. At 5% the deciding factor should be whether the house version is noticeably better.
Why does batch size change the answer so much?
Setup, heating and cleanup are largely fixed per batch, so halving the batch does not halve the minutes. Run the calculator at the batch size you will realistically produce, not the largest one your equipment allows.
How often should I re-run these numbers?
Once a year as a matter of course, and immediately after any wage increase or supplier price change on the items concerned. Decisions made three years ago on wages that no longer exist are the most common source of quietly unprofitable prep.