Hourly pay and labor budget calculator

What you will enter

• Weekly net sales ($): Sales for a normal week, excluding sales tax and pass-through tips.
• Total labor target (%): The share of sales your plan allows for all labor cost, including employer costs. Enter 30 for 30%.
• Regular hours across employees (hours / week): Total hours up to 40 per employee. Take them from the shift planner, which splits regular and overtime employee by employee.
• Overtime hours across employees (hours / week): Hours above 40 per employee, already identified per person. Enter 0 if nobody exceeds 40.
• Estimated employer costs above wages (%): Your estimate of employer payroll taxes, workers' compensation, unemployment insurance and similar costs as a percentage of wages. This tool does not supply a tax rate.
• Other fixed weekly employer labor costs ($): Benefits, payroll service fees or other labor costs that do not move with hours. Enter 0 if none.
• Applicable hourly minimum you verified ($): The legal floor for this job, location and date, from the official source. Enter what you verified, not a national figure.
• Proposed average base hourly pay ($): The average base rate you are considering across the hours entered. Individual rates will differ by job.

The formula

Supported average rate = (weekly sales × labor target − fixed labor costs) ÷ (1 + employer burden) ÷ (regular hours + 1.5 × overtime hours). Cost at a proposed rate = rate × equivalent hours × (1 + burden) + fixed costs.

A worked example

Fictional example: $15,000 of weekly sales at a 30% target gives a $4,500 labor budget. After $200 of fixed costs and a 15% employer-cost allowance, $3,739.13 is available for wages across 175 straight-time-equivalent hours (160 regular + 1.5 × 10 overtime), so the budget supports an average base rate of about $21.37. A $22 average costs $4,627.50 a week, 30.85% of sales, and would need $15,425 in weekly sales to stay at 30%.

How to use the result

Verify the legal floor first, for this job and this date

A national average never overrides a higher local requirement. New York and New Jersey publish their own tables; tipped-work rules are conditional, not a discount. Enter the figure you verified in the minimum field so the tool can warn you.

Hours come from the schedule, employee by employee

Two people at 30 hours do not create overtime; one person at 45 does. Build the week in the shift planner, then carry its regular and overtime totals here. Do not trim compensable time to make the number work.

Affordable is not the same as appropriate

If the budget supports $21 and comparable local jobs pay $23, the answer is not to underpay. Change prices, coverage, complexity or the concept. Record what you found with the pay research template so the decision has evidence behind it.

Questions owners ask

Where does the employer burden percentage come from?

From your own estimate. IRS Publication 15 gives the 2026 employer social security and Medicare rates and the FUTA rate; state unemployment insurance, workers' compensation and benefits vary. Ask your payroll provider or accountant for a figure for your state and use that.

Can I use this for tipped employees?

Not directly. Tip credits, the cash wage and the regular-rate rules for overtime need a payroll calculation that follows the applicable state rules. Use the tool for base-wage planning and confirm tipped-role pay separately.

Why does the tool not tell me what cooks are paid?

Because a national median (the BLS reports $17.62 an hour for cooks nationally in May 2025) is broad historical context, not a local offer for your job. Build a dated sample of comparable local postings instead.

Keep working on the decision

• Read: how much should you pay restaurant employees per hour?
• Build the week's shifts and see each employee's overtime
• Learn labor cost from the first percentage
• Download the pay research log and hiring templates
• New to percentages? Start with restaurant math from zero.
• Add this decision to your guided opening plan

Sources and scope

• U.S. Department of Labor, Fact Sheet #23: Overtime Pay Requirements of the FLSA (revised October 2019)
• U.S. Department of Labor, Fact Sheet #22: Hours Worked Under the FLSA (revised July 2008)
• U.S. Department of Labor, Fact Sheet #2: Restaurants and Fast Food Establishments Under the FLSA (revised December 2016)
• U.S. Department of Labor, Fact Sheet #15: Tipped Employees Under the FLSA
• IRS Publication 15 (2026), Employer's Tax Guide: social security 6.2% to the $184,500 wage base, Medicare 1.45%, FUTA 6.0% on the first $7,000 less up to a 5.4% credit
• New York State Department of Labor, Minimum Wage for Tipped Workers (rates for January 1 to December 31, 2026)
• New Jersey Department of Labor, Wage and Hour Compliance FAQs ($15.92 for most workers effective January 1, 2026)
• U.S. Bureau of Labor Statistics, Occupational Outlook Handbook: Cooks (May 2025 median wage, page updated August 27, 2026)

Planning estimates based on your inputs. Check the assumptions against your actual quotes, recipes and operating records. Not legal, tax or accounting advice.