What is the FL Ratio?
The FL ratio (F = Food, L = Labor) is one of the most-watched key performance indicators in restaurant management worldwide. It expresses the combined cost of food ingredients and total labor as a percentage of sales. Because food and labor are typically a restaurant's two largest controllable costs, tracking them together gives a quick, reliable read on operational health. This tool is currency-agnostic: enter all three amounts in the same currency and the result is identical.
How to use this calculator
Enter your Food Cost (F) for the period, your Labor Cost (L) and your Sales (Revenue). Labor cost should be the total labor cost - not just base salaries, but also bonuses and all employee benefit and welfare expenses. The calculator returns the FL ratio plus the individual food and labor ratios, the total FL cost, and a quick assessment against industry guidance.
The formula explained
$$\text{FL Ratio} = \frac{\text{Food Cost} + \text{Labor Cost}}{\text{Sales}} \times 100\%$$ The food ratio and labor ratio are computed the same way for each component, and they add up to the FL ratio - a handy sanity check. Industry guidance suggests a typical FL ratio sits around 55%-65%, with 55% being a strong target. Ratios above 100% indicate costs exceeding sales (a loss-making period); this is valid output, not an error.
Worked example
Suppose food cost = 300,000, labor cost = 250,000 and sales = 1,000,000. Total FL cost = 550,000. $$\text{FL Ratio} = \frac{550{,}000}{1{,}000{,}000} \times 100 = 55.0\%$$ Food ratio = 30.0%, labor ratio = 25.0%, and \(30.0 + 25.0 = 55.0\), confirming the identity. At exactly 55%, the assessment is "Excellent - at or below the 55% target."
FAQ
What counts as labor cost? Total labor cost: salaries, bonuses, and all employee benefit/welfare expenses.
What is a good FL ratio? Around 55% is a common target; 55%-65% is considered the typical industry range.
Can the ratio exceed 100%? Yes - if combined food and labor cost exceeds sales, the ratio goes above 100%, signaling an unprofitable period.
