Labor Cost Percentage (LCP)
Employee salaries and benefits as % of total operating revenue
FORMULA
LCP = (Total Labor Costs / Total Revenue) × 100
Alternate Calculations
by Department
Department labor / Department revenueWhat is Labor Cost Percentage?
LCP measures labor intensity of business model. Hospitality benchmark 30-35%, manufacturing 20-25%. Higher percentages reduce profitability.
Critical metric for margin management.
Chart
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Sample Data
| month | labor | revenue | pct |
|---|---|---|---|
| Jan | 125,000 | 400,000 | 31.3 |
| Feb | 132,000 | 420,000 | 31.4 |
| Mar | 138,000 | 450,000 | 30.7 |
| Apr | 142,000 | 480,000 | 29.6 |
Required Data Columns
labor_costrevenuepercentage