What is the 30/30/30 rule for restaurants?

The 30/30/30 rule is an informal budgeting rule of thumb that splits a restaurant's revenue into three roughly equal buckets: about 30 percent for food and beverage (cost of goods), about 30 percent for labor, and about 30 percent for overhead — rent, utilities, insurance, marketing, and other fixed costs — leaving roughly 10 percent as profit. It is a quick sanity check for whether your costs are in a healthy range, not a strict law, and the real percentages vary widely by concept, location, and service style.

What is the 30/30/30/10 rule for restaurants?

The 30/30/30/10 rule is the 30/30/30 rule with the profit slice named: about 30 percent of sales for food and beverage, 30 percent for labor, 30 percent for overhead, and 10 percent left as profit. According to it, food cost should ideally run at about 30 percent of sales. Like the 30/30/30 rule, it is a benchmark for spotting a bucket that is out of line, not a target every restaurant must hit.

How do you calculate food cost percentage?

Food cost percentage is food cost divided by food sales, multiplied by 100. Work out food cost for a period as opening inventory plus purchases minus closing inventory, so you measure what you used rather than what you bought. For example, $15,000 of food cost on $50,000 of sales is 30 percent, which is exactly where the 30/30/30 rule puts it. For a single dish, divide the plate cost by the menu price; our food cost calculator does that and suggests a price.

Is the 30/30/30 rule a strict rule?

No. It is a rule of thumb, not an accounting standard or a law. Real restaurants land all over the place: a fine-dining kitchen may run higher food and labor costs, a bar with high-margin drinks may run food costs well under 30 percent, and rent varies enormously by city. Use 30/30/30 as a starting benchmark to spot when a cost bucket is out of line, then compare against numbers for your specific type of restaurant rather than treating the thirds as targets you must hit.

What percentage should a restaurant spend on marketing?

Marketing usually sits inside the roughly 30 percent overhead slice, and there is no universal figure — it depends on your stage and goals. A new restaurant or a grand opening typically spends more to build awareness; an established spot with steady regulars spends less. The sound approach is to start with a small, consistent budget, measure which channels actually fill tables, and move money toward what works — rather than fixing a rigid percentage. Note that the highest-return restaurant marketing (a complete Google Business Profile, reviews, an email list) costs little to nothing.

How does real restaurant profit compare with the 30/30/30 rule?

The 30/30/30 rule implies about 10 percent profit, but most restaurants make less. In the National Restaurant Association's survey of 2024 results, the median full-service restaurant made 2.8 percent of sales before tax and the median limited-service restaurant 4.0 percent. Our restaurant profit margin guide breaks those figures down and has a calculator for your own numbers.

The 30/30/30 Rule for Restaurants, Explained

The 30/30/30 rule for restaurants is an informal budgeting benchmark that splits revenue into three roughly equal buckets — about 30 percent for food and beverage, 30 percent for labor, and 30 percent for overhead — leaving roughly 10 percent as profit. It is a quick sanity check on whether your costs are in a healthy range, not a law, and real restaurants vary widely from it. Below: what each bucket covers, the 30/30/30/10 version, a worked example with the sums shown, a calculator for your own numbers, and where a marketing budget fits.

The three buckets

Bucket (≈30% each)	What it covers
Food & beverage	Your cost of goods — ingredients, drinks, and everything that goes into what you serve
Labor	Wages, salaries, payroll taxes, and benefits for kitchen and front-of-house
Overhead	Rent, utilities, insurance, equipment, supplies, and marketing

Add three roughly-30-percent buckets and you have used about 90 percent of revenue, which leaves around 10 percent as profit — the fourth, unspoken part of the rule.

The 30/30/30/10 version

The 30/30/30/10 rule is the same rule with the profit written in: 30 percent food and beverage, 30 percent labor, 30 percent overhead and 10 percent profit. Nothing changes except that the leftover slice gets a name, which makes the point that profit is a planned share of every sale, not whatever happens to be left at the end of the month.

So, according to 30/30/30/10, food cost should ideally be about 30 percent of sales, labor about 30 percent, overhead about 30 percent, and about 10 cents of every dollar should be left over.

Two related numbers come straight out of the rule:

Prime cost is food plus labor, the two costs you can move week to week. Under 30/30/30 it is about 60 percent of sales. Our prime cost guide shows how to track it weekly and what real restaurants run at.
Profit is sales minus all three buckets. Under 30/30/30 it is about 10 percent, more than most restaurants actually make: see restaurant profit margin.

A worked example

These figures are illustrative, made up to show the math, not a real restaurant. Say a restaurant takes $50,000 in sales in a month.

Bucket	30/30/30/10 share	Of $50,000
Food and beverage	30%	$50,000 × 0.30 = $15,000
Labor	30%	$50,000 × 0.30 = $15,000
Overhead	30%	$50,000 × 0.30 = $15,000
Profit	10%	$50,000 − $45,000 = $5,000

Now say food cost actually came in at $20,000 that month, with labor and overhead on plan:

Food cost percentage: $20,000 ÷ $50,000 = 40 percent, 10 points over the benchmark.
Prime cost: $20,000 + $15,000 = $35,000, or 70 percent of sales.
Profit: $50,000 − $20,000 − $15,000 − $15,000 = $0.

That is the rule doing its job: one bucket ten points out of line wiped out the whole profit slice, and the split tells you which bucket to look at first.

A cafe owner working through invoices and paperwork behind the counter

How to calculate your own split

Take one month of sales from your point-of-sale or accounting system.
Work out food and beverage cost for the same month: opening inventory, plus purchases, minus closing inventory. That gives what you actually used, which is more accurate than what you bought.
Add up labor: wages, salaries, payroll taxes and benefits.
Add up overhead: rent, utilities, insurance, repairs, supplies, software, marketing and everything else.
Divide each bucket by sales and multiply by 100. Food cost percentage = food cost ÷ food sales × 100. Labor and overhead are divided by total sales.

To cost and price a single dish rather than a whole month, use the food cost calculator. For the whole month, put the numbers in here:

Check your own numbers against 30/30/30

Enter one month from your books. Nothing is sent anywhere; the math runs in your browser.

Sales for the monthTotal revenue before costsFood and beverage costWhat you paid for ingredients and drinksLabor costWages, payroll taxes and benefitsOverheadRent, utilities, insurance, marketing, the rest

Food and beverage30% ($15,000)
on the 30% benchmark
Labor30% ($15,000)
on the 30% benchmark
Overhead30% ($15,000)
on the 30% benchmark

Left over (profit before tax): 10% ($5,000); At or above the 10% the rule leaves.
Prime cost (food + labor): 60% ($30,000); 30/30/30 puts this at about 60%.

30% is a rule-of-thumb benchmark, not a target. A bar, a fine-dining room and a food truck all run different healthy splits, so read a gap as a question to look into, not a verdict.

It is a rule of thumb, not a law

The neat thirds are a starting point, not targets you must hit. Real restaurants land all over the map:

A fine-dining kitchen often runs higher food and labor costs because of premium ingredients and skilled staff.
A bar or cafe with high-margin drinks may run food costs well below 30 percent.
Rent swings enormously by city and location — a prime downtown spot can blow past the overhead third on rent alone.

So use 30/30/30 to spot when a bucket is out of line — if food cost is running at 40 percent, something is wrong with pricing, portioning, or waste — then compare against benchmarks for your specific type of restaurant rather than forcing your numbers into perfect thirds. Restaurant profit margins are commonly thin, frequently in the single digits — the National Restaurant Association's 2025 Restaurant Operations Report put the median income before taxes at 2.8 percent of sales for full-service and 4.0 percent for limited-service restaurants — which is exactly why watching these buckets matters: small improvements move the profit line a lot. The lever for improving the food bucket one dish at a time is menu engineering.

Hands writing calculations in a notebook beside a calculator and cash

Where marketing fits

Marketing lives inside the overhead slice — the same roughly 30 percent that also has to cover rent, utilities, and insurance. That is a useful reality check: marketing competes with your fixed costs, so it has to earn its place.

Two things follow from that:

There is no fixed "right" marketing percentage. A grand opening or a new restaurant spends more to build awareness; an established spot with a full book spends less. Start with a small, steady budget, measure what fills tables, and move money toward what works. See the restaurant advertising guide for how to think about the spend across channels. If you do put money into paid ads, Google Ads for restaurants is usually the first place it earns back, because you only pay when someone who is already looking for a place to eat clicks your ad.
The highest-return marketing barely touches the budget. A complete Google Business Profile, a steady flow of reviews, and an email list cost little to nothing and often out-perform paid ads. Fix the free foundations before you spend from the overhead slice.

The bottom line

The 30/30/30 rule is a helpful mental model: it reminds you that food, labor, and overhead each eat about a third of revenue, that profit is the thin slice left over, and that marketing has to fit inside overhead. Treat it as a benchmark to sanity-check your costs — not a formula to obey. For the full picture of how marketing fits into running the restaurant, see our complete restaurant marketing guide. If you are still at the planning stage, what it costs to open a restaurant covers the one-off budget that comes before these running costs.