Labour Cost Percentage Calculator NZ 2026

This calculator works out what share of your revenue goes on labour, which is the single number most hospitality and retail operators manage their week by. You enter revenue for a period, the wages paid in the same period, your employer KiwiSaver rate and ACC work levy, and any other employment costs such as training or uniforms, along with the target percentage you are aiming at. It returns your loaded labour cost percentage, the wages only figure for comparison, the total labour cost in dollars, how much revenue each dollar of labour produces, and how far above or below your target you are in both percentage points and dollars. Two things sink this calculation more often than anything else. The first is GST: revenue must be entered excluding GST, because GST is collected on behalf of Inland Revenue and never belongs to the business, and using a GST inclusive figure makes a 30 percent labour cost look like about 26 percent. The second is measuring wages alone. Employer KiwiSaver of at least 3.5 percent and the ACC work levy are real cash costs of employing someone, and leaving them out understates the figure by several percent, which is easily enough to hide a problem for a month. What counts as a good percentage depends entirely on your industry, so compare it against your own history and your own budget rather than a benchmark from somewhere else.

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31.5%
of revenue goes on labour, including on-costs
Total labour cost$5,675
Wages only29.5%
Revenue per labour dollar$3.17
Against target$275 over

You are 1.5 percentage points above your 30% target, which is $275 of labour cost for this period. Revenue excluding GST is the correct denominator: using a GST inclusive figure would understate this by roughly four percentage points.

How it works

Total labour cost adds gross wages, employer KiwiSaver as a percentage of those wages, the ACC work levy as a percentage of the same, and any other employment costs you enter. The labour cost percentage divides that total by revenue excluding GST. The wages only percentage divides gross wages alone by the same revenue, and the gap between the two figures is what on-costs are adding. Revenue per labour dollar divides revenue by total labour cost and answers the question the other way round: how much trading each dollar spent on people is producing. The comparison against target converts the difference in percentage points back into dollars for the period, because a point and a half sounds small until it is priced.

Worked example

A cafe takes $18,000 excluding GST in a week and pays $5,304 in wages, with employer KiwiSaver at 3.5 percent, an ACC work levy of 0.67 percent and $150 of other employment costs. KiwiSaver adds $185.64 and the levy adds $35.54, so total labour cost is about $5,675. That is 31.5 percent of revenue, against 29.5 percent measured on wages alone, so on-costs are worth two percentage points on their own. Every dollar of labour is producing $3.17 of revenue. Against a 30 percent target the business is 1.5 points over, which for this week is about $275.

Related calculators

Data sources: the rates on this page are maintained against Inland Revenue and Employment New Zealand. Figures are checked twice monthly.

Frequently asked questions

Should revenue include GST when working out labour cost percentage?

No. Use revenue excluding GST. GST is collected on behalf of Inland Revenue and never belongs to the business, so including it inflates the denominator and makes labour cost look lower than it is. On a GST inclusive figure at 15 percent, a labour cost of 30 percent would show as about 26 percent, which is a large enough error to hide a real problem.

What is a good labour cost percentage?

It depends entirely on the industry, so compare against your own history and your own budget rather than a number from the internet. Hospitality and retail typically watch this figure weekly because it moves with the roster, while a professional services firm where labour is nearly the whole cost base will run far higher and manage it differently. What matters is the trend and whether it is inside the target you set.

Does labour cost percentage include employer KiwiSaver and ACC?

It should, and many businesses measure wages alone and understate the figure by several percent. Employer KiwiSaver of at least 3.5 percent of gross pay and the ACC work levy are both real cash costs of employing people. This calculator shows both the loaded figure and the wages only figure so you can see the gap between them.