The 30/30/30/10 Rule for Restaurants, Explained (and the 60/40 Rule)
Someone — a supplier rep, a Facebook group, a consultant you paid for an hour — told you your restaurant should run on the 30/30/30/10 rule. Thirty percent food, thirty percent labor, thirty percent overhead, ten percent profit. It sounds clean. It fits on a napkin. And it leaves you staring at your own messy P&L wondering whether the gap means you’re doing it wrong.
Here’s the short version, up front: the 30/30/30 rule restaurant operators pass around is a budgeting target, not a law of physics — a rough map of where every sales dollar is supposed to go. It’s a genuinely useful gut-check. It’s also where a lot of owners quietly kid themselves, because three of the four buckets are easy to undercount. Let’s take it apart.
Where every dollar is supposed to go
On every $100 that comes through the register, the rule says it should split like this:
| Bucket | Share | On $100 of sales |
|---|---|---|
| Food & beverage (COGS) | 30% | $30 |
| Labor | 30% | $30 |
| Overhead — rent, utilities, insurance, the rest | 30% | $30 |
| Profit | 10% | $10 |
That’s the whole rule. Food and labor are your two big controllable costs. Overhead is everything else it takes to keep the lights on and the doors open. And profit — in the rule — is the ten dollars left standing at the end.
What each bucket actually includes (and where it leaks)
Food & beverage is everything you buy to sell — not just the center of the plate, but the sauces and sub-recipes you make in-house and the trim you throw in the bin. Most owners cost the plate and forget the yield, which is how this bucket runs heavier than the recipe says it should.
Labor is wages, yes — but also payroll taxes, benefits, and the line owners skip: your own salary. If your labor looks like a tidy 25%, check whether you’re actually paying yourself. Plenty of “profitable” independents are only profitable because the owner works for free, which isn’t profit — it’s a job that happens to own the building.
Overhead is the junk drawer. Rent, utilities, insurance, marketing, repairs, card-processing fees, cleaning, linens, accounting, software, small wares. It’s never one number; it’s fifteen small ones, and they drift up one quiet renewal at a time.
Profit is the residual. You don’t take ten percent — profit is whatever the other three buckets leave behind. That’s the uncomfortable part of the rule: the one bucket you care about most is the one you can’t set directly. You can only protect it by keeping the other three honest.
The 60/40 rule is the same rule, grouped differently
You’ll hear a second number thrown around: the 60/40 rule. It isn’t a competing system — it’s the 30/30/30/10 rule with the buckets grouped.
| Grouping | Share | On $100 |
|---|---|---|
| Prime cost (food + labor) | 60% | $60 |
| Everything else (overhead + profit) | 40% | $40 |
Add food and labor together — 30 plus 30 — and you get your prime cost: 60%. It’s the single most useful number in the building, because it’s the one you can actually move week to week. Overhead is mostly locked in by leases and contracts; prime cost is portions, schedules, suppliers, and waste — the things you touch every shift. Keep prime cost at or under 60% and the rest of the rule tends to fall into line. Let it drift to 65% and the ten-dollar profit bucket is exactly where that five dollars comes from.
Where the rule breaks — and where owners kid themselves
Two honest caveats, because the napkin version hides them.
First, it’s an average, not a target every restaurant should hit. A pizzeria or a bar runs food cost in the low twenties and can sit above the rule on labor or rent and still do fine. A white-tablecloth spot with a full kitchen brigade runs labor well past 30 and makes it back on check average. The 30/30/30/10 split is the middle of a wide road, not a lane you’re required to stay in. Manage the levers underneath it, not the round numbers on top.
Second — and this is the one that stings — the 10% profit line is aspirational for a lot of independents. Ask around honestly and full-service net margins tend to land in the low-to-mid single digits, not a clean ten percent. That’s not because owners are bad at math. It’s because profit is the shock absorber: when food creeps up two points and labor creeps up two points, nothing else bounces. Only the bottom line does.
What the drift actually looks like
Here’s the same $100, in a by-the-rule month and in a slightly-off one:
| Bucket | The rule says | A tighter month often looks like |
|---|---|---|
| Food & beverage | $30 | $33 |
| Labor | $30 | $32 |
| Overhead | $30 | $30 |
| Profit | $10 | $5 |
Three dollars of food, two of labor. Overhead didn’t even move. And profit got cut in half. That’s the whole story of how a busy, decent-looking restaurant still comes up short at the end of the month — the exact feeling we pulled apart in why your busy restaurant still isn’t making money. The rule can’t see this happening. It tells you where you should be; it never tells you where you are.
How to protect the bucket that matters
If profit is a residual, the way you defend it is by keeping the other three buckets honest — and there’s an order to it. When a dish’s cost creeps up (which is usually what’s nudging that food line from $30 toward $33), you reach for the cheap levers first:
- Fix the portion. The most common cause, and free. The protein you eyeball drifts a little heavier over a busy stretch and the food bucket swells with it.
- Work the supplier. A price crept up on an invoice you signed in four seconds. Verify it, push back, or price-check one alternative before you accept it.
- Reformulate gently, where the dish can carry a small change the customer won’t notice.
- Reprice — last. Only when the first three can’t close the gap, and only on the specific dishes that need it.
Notice that raising prices is the last move, not the first. When your food line drifts off the rule, the instinct is “I need to charge more.” Usually what you need is to find the leak. The food cost percentage pushing you off the rule is a symptom — it crept up and “nothing changed” — and the number itself won’t tell you which bucket sprang the leak. Only going down to the dish does that.
The honest catch
The 30/30/30/10 rule is a fine map. It’s a useless dashboard. Knowing you should run 30% food does nothing for you if you can’t see that you’re actually running 34% until the accountant tells you at month-end — six weeks after the portion drifted or the supplier nudged a price. By then the profit bucket has already quietly paid for it. You can rebuild the real numbers by hand, recosting your top dishes against this week’s invoices, and it works — for exactly the day you do it. Then the prices move again and it’s stale.
That’s the whole reason Mise exists. You snap a photo of each supplier receipt as it comes in, and we keep the real cost of every dish — and every sauce inside it — current against the prices you’re actually paying. So when your food line starts sliding off the rule, you catch it while it’s still a portion tweak or a supplier call, not a year-end surprise. We keep the “thirty” honest so the “ten” has a chance.
But you don’t need us to start. Pull last month’s P&L, sort your costs into the four buckets, and add up your prime cost. Under 60% and you’re on the road. Climbing past it, and you know exactly which lever to reach for first. And if you want the food side kept honest automatically, dish by dish — see what your menu actually costs →
Built by people who’ve worked the line, signed the leases, and stared at the books. We help independent restaurants know what every dish actually costs — and what to do about it.
