Coffee Shop Labor Cost: What the Number Should Be

The metric that matters: SPLH

Set aside overall labor cost percentage for a moment. The most useful number in specialty coffee is Sales Per Labor Hour (SPLH), which measures how much revenue your team produces for every hour worked on shift.

The formula is straightforward:

For a beverage-focused cafe with counter service, a healthy target is $90 to $125 per hour. That number shifts depending on your format.

If you run a full kitchen with hot food prep, expect a lower SPLH. The extra labor required to plate food means more hours worked per dollar of revenue. Comparing a full-service cafe-kitchen to an espresso bar on the same target will mislead you.

Use SPLH to compare your own stores of similar format against each other, and track trends over time across days of the week.

What your SPLH number indicates

Why SPLH beats labor cost percentage

Labor cost percentage (total payroll spend divided by revenue) is useful for accountants, but it hides operational reality. Two cafes can post identical 30% labor cost metrics with completely different efficiency. One operates with experienced baristas earning higher hourly rates on lean shifts. Another uses lower hourly wages while burning unnecessary overtime on slow days.

SPLH isolates hourly output directly, which is what store managers can actually schedule and manage day to day.

Holidays and weather shift your numbers

The same holiday affects different locations in opposite ways. An office-district cafe might lose 80% of its volume on Presidents Day because offices are closed. A residential neighborhood cafe might gain 30% because residents stay local and walk over for morning coffee.

Scheduling both stores with standard Monday hours leaves one overstaffed and the other overwhelmed. A blanket schedule across multi-unit operations creates unnecessary wage waste.

Weather follows the same rule. A walk-up window might lose 20% of revenue during rain, while a drive-thru or spacious indoor cafe holds steady.

How to track SPLH

You need two inputs: net sales from Square (or your POS) and actual hours worked from your timesheet system (such as Square Team, 7shifts, or Homebase).

To do this manually, pull daily net sales from Square, pull total hours worked from your timesheet export, and divide. Track this daily for a month to establish your store's true baseline.

MetriCup automates this entire calculation across all your stores every night.