Labour is your biggest controllable cost. It’s also the most poorly managed cost in most venues. Operators don’t understand their own labour metrics, they underestimate the true cost of penalty rates, and they build rosters by habit rather than by design. The result is a cost structure that’s a third higher than it needs to be.
Here are the benchmarks by venue format. Know what the targets are. Then measure yourself against them. If you’re running above target, you have a rostering problem or a productivity problem. Both are fixable once you see them.
Benchmarks by Format
Cafe. 30–35% of revenue. This is low because throughput is high, service is minimal, and most work is done by the owner or a small core team. The moment you add complexity — all-day dining, table service, cocktails — you move toward 35–40%.
Casual dining. 28–32% of revenue. This is your sweet spot if you can hold it. You have enough covers to spread fixed labour costs, service is straightforward, and staff can be trained quickly. The challenge is staffing consistency and shift management.
Fine dining. 32–38% of revenue. Higher because service is more labour-intensive, covers are lower, and staff needs to be highly trained. You’re paying for precision, knowledge, and a curated experience.
Bar and nightclub. 22–28% of revenue. Low because most work is drinks only, throughput is high, and labour is concentrated during peak hours. The challenge is wage variance due to penalty rates on nights and weekends.
Hotel F&B. 35–42% of revenue. Highest because of 24-hour coverage, complex rosters, split service times, and penalty rate exposure. Hotels run permanent night staff, which means penalty rates almost every shift.
Function venue. 25–30% of revenue. Lower because service is episodic and you can hire casual staff for specific events. You don’t carry fixed costs across empty nights.
The Penalty Rate Trap
Most operators underestimate their penalty rate exposure. Here’s how it works under the Master Award MA000009. A hospitality worker on a full-time contract earning, say, 65,000 dollars per year costs you much more on a weekend than weekdays. Saturday is 125% of full time. Sunday is 150%. Public holidays are 225%.
If your roster is front-loaded with weekends and nights, you’re paying enormous amounts just in penalty loading. A venue that schedules six servers on Saturday and Sunday but three midweek is automatically paying 50% more per server in penalty rates. Multiply that across your entire staff and you see why labour blows out.
The same work can cost you 35% more or 35% less depending on when you schedule it. Most operators don’t optimize for this. They schedule by convenience or habit. That’s leaving thousands on the table.
The Hidden Costs of Labour
Your wage bill is only part of the story. On top of wages you’re paying superannuation at 12%. Leave loading at 17.5%. WorkCover insurance, which varies by state but averages around 2.5%. And in Victoria, payroll tax at 4.85% for payroll over 600,000 dollars.
So a casual earning 25 dollars per hour isn’t costing you 25 dollars. It’s costing you closer to 30 dollars when you factor in super and leave. And if they’re full-time, add another 4–5% for payroll tax depending on your total payroll.
Most operators don’t include these on-costs when they budget labour. They shock themselves when they see the actual payroll tax bill at the end of the financial year.
Casual vs Full-Time
This is where operators make big decisions and don’t actually understand the math. Let’s say you need someone 15 hours a week on an ongoing basis. Your options are casual at 26 dollars per hour or full-time at 65,000 per year prorated to 15 hours.
Casual: 15 hours times 26 dollars times 52 weeks equals 20,280 dollars per year, plus super at 12%, equals 22,714 dollars. Add leave loading at 17.5% on top and you’re at 26,700 dollars.
Full-time: 65,000 dollars prorated to 15 hours is 18,750 dollars, plus super 12% is 21,000 dollars, plus payroll tax at 4.85% is 22,020 dollars.
The full-time option is actually cheaper in this case. But you only see it if you do the math. Most venues don't. They assume casual is cheaper because the hourly rate is lower, which is how casual positions become the default even when they’re economically worse.
The Labour Cost Calculator
I built a calculator that helps you model labour costs accurately. You plug in your shift structure, your staff, your rates, and the penalty loadings are calculated automatically. You can test different roster configurations and see which one is most cost-efficient. It’s the difference between guessing and knowing.
Most venues are running 5–10% over target on labour because they haven’t optimized for reality. The calculator lets you see where those gaps are and how to close them.
You don’t have to overpay for labour. You just have to measure it properly.