The 30/30/30/10 rule for restaurants: what it means, with a worked example
Updated October 19, 2026
The 30/30/30/10 rule is a restaurant budgeting rule of thumb: about 30% of sales goes on food and drink costs, 30% on labor, 30% on everything else it takes to run the place, and the last 10% is profit. It's not a law or an industry standard, just a quick check. If one bucket creeps well above 30%, it eats into the 10% you keep.
In short
- 30% cost of goods sold (COGS): food, drinks and other ingredients.
- 30% labor: wages, payroll taxes, benefits and training for all staff.
- 30% operating costs (overhead): rent, utilities, insurance, card and platform fees, marketing, repairs, software and the rest.
- 10% profit: what's left before the owner's own taxes.
- Use it as a diagnostic, not a target every restaurant can hit. Concepts differ: fast casual tends to run leaner on labor, fine dining heavier.
Where the rule comes from, and what it isn't
You'll find the rule on restaurant-accounting and supplier blogs, sometimes as the "30-30-30 rule" with the 10% profit left implied. It's a simplification of how restaurant P&Ls usually look, not a figure from a regulator or a trade body.
Two things it is not:
- Not the personal-finance "30:30:30:10" rule. Search for "30 30 30 10" and half the results are about splitting a salary into needs, wants, savings and investing. Same numbers, different idea.
- Not a guarantee of 10% profit. It tells you where your money should roughly go. Your own lease, location and menu decide what's realistic.
The four buckets
| Bucket | Share of sales | What goes in it | Lever to pull if it's high |
|---|---|---|---|
| COGS (food and drink) | ~30% | Ingredients, drinks, packaging you treat as food cost | Recipe costing, portion control, supplier prices, menu prices, waste |
| Labor | ~30% | Wages, payroll taxes, benefits, training, for front and back of house | Scheduling to demand, cross-training, opening hours |
| Operating costs | ~30% | Rent, utilities, insurance, card processing, delivery-app and software fees, marketing, repairs, cleaning, accounting | Renegotiate, cut unused subscriptions, move orders to cheaper channels |
| Profit | ~10% | What's left | Comes from the other three |
Food plus labor together is often called prime cost. Under this rule, prime cost is about 60% of sales.
In the UK and some other markets, food cost is often talked about the other way round, as gross profit (GP): a 30% food cost is a 70% GP on food. Our GP calculator works in GP.
Worked example: checking a month against the rule
A neighborhood restaurant takes $50,000 in sales in a month. Here's the rule's split next to its actual numbers.
| Rule of thumb | Rule in dollars | Actual this month | Actual % of sales | |
|---|---|---|---|---|
| Sales | 100% | $50,000 | $50,000 | 100% |
| COGS | 30% | $15,000 | $16,500 | 33% |
| Labor | 30% | $15,000 | $15,500 | 31% |
| Operating costs | 30% | $15,000 | $14,500 | 29% |
| Profit | 10% | $5,000 | $3,500 | 7% |
How to read it: operating costs are fine. Food is 3 points over, and labor 1 point over. Together they cost $2,000 of profit this month ($1,500 + $500 over the rule). The first place to look is food cost: re-cost the top-selling dishes and check portions and waste.
What each extra point costs
On $50,000 a month, every 1% of sales is $500 a month, or $6,000 a year. Bringing food cost from 33% back to 30% would add $1,500 a month to profit in this example, without selling a single extra meal.
How to run the check on your own numbers
- Pick a period (a month is easiest) and take total sales from your POS or accounts, before sales tax.
- Add up COGS: opening inventory + purchases − closing inventory for food and drink.
- Add up labor: every wage, payroll tax and benefit for the same period.
- Add up operating costs: everything else you paid to run the business, including card fees and delivery-app commission.
- Divide each by sales and multiply by 100.
- Compare with 30/30/30/10 and start with the bucket that's furthest over.
Free tools that help: the recipe cost calculator for dish-level food cost, the menu price calculator to set prices that hit your target, the staff rota maker for scheduling, and the break-even calculator to see the sales you need each month.
What delivery-app commission does to the rule
Delivery-app commission is an operating cost, and it lands on a single order, not spread across the month. That's where the rule shows the problem clearly.
For illustration: on a $30 order, the rule leaves about $3 of profit (10%). If a marketplace takes a 30% commission on that order, that's $9, three times the profit the rule allows for. The order can still be worth taking for the new customer it brings, but repeat orders from regulars cost far less through your own ordering page.
Commission rates differ by app and country; see the published rates in our delivery app commission guide. With commission-free online ordering, the operating cost on a direct order is your card processing fee and a flat monthly plan. Menuthere's ordering page has a free plan with 0% commission (online ordering for US restaurants).
Keep more of each order.
When the rule doesn't fit
- High-rent locations can run operating costs above 30% and make it up with lower food cost.
- Counter-service and fast casual usually need fewer staff per sale, so labor can sit below 30% while COGS runs higher.
- Fine dining often spends more on labor and on premium ingredients.
- Bars usually run a much lower cost of goods on drinks than kitchens do on food.
The point is balance: if one bucket is high, another has to be lower, or the 10% shrinks.
Frequently asked questions
What is the 30/30/30/10 rule for restaurants?
It's a budgeting rule of thumb that splits sales into about 30% food and drink costs, 30% labor, 30% operating costs and 10% profit. It's a quick way to see which cost is eating into profit, not an official standard.
Is the 30-30-30 rule the same as the 30/30/30/10 rule?
Usually, yes. The 30-30-30 version names the three cost buckets of food, labor and overhead, and the 10% profit is what's left over.
What counts as overhead in the 30/30/30/10 rule?
Everything that isn't food cost or labor: rent, utilities, insurance, repairs, marketing, software, card processing fees and delivery-app commission.
What is prime cost?
Prime cost is food and drink cost plus labor. Under the 30/30/30/10 rule it's about 60% of sales.
Is a 10% profit margin realistic for a restaurant?
It depends on the concept, location and lease. The rule treats 10% as the target if the three cost buckets stay near 30% each. Run the check on your own numbers to see where you stand.
How do I calculate my food cost percentage?
Add opening inventory to purchases, subtract closing inventory, then divide by food and drink sales for the same period and multiply by 100. A dish-level check works the same way: ingredient cost divided by menu price.
How does delivery-app commission affect the rule?
Commission is an operating cost charged on each order. On a $30 order the rule leaves about $3 of profit, so a 30% commission of $9 is three times that. Direct orders through your own ordering page avoid the commission.
Sources (3)
- Restaurant Accounting Services, "What Is the 30-30-30-10 Rule for Restaurants?": https://www.restaurant-accounting.com/what-is-the-30-30-30-10-rule-for-restaurants/ (accessed 19 Oct 2026): 30% COGS, 30% labor, 30% operating expenses, 10% profit margin; "isn't a one-size-fits-all solution"; fast casual lower labor, fine dining higher.
- CHEF'STORE, "What is the 30-30-30 Rule For Restaurants?": https://www.chefstore.com/about/blog/what-is-the-30-30-30-rule-for-restaurants/ (accessed 19 Oct 2026): "sometimes called the 30/30/30/10 rule"; 30% food costs, 30% labor (wages, payroll taxes, benefits, training), 30% overhead, 10% profit.
- Ahrefs SERP overview, US, "30 30 30 10 rule" (19 Oct 2026): results split between the restaurant rule and personal-finance pages.