Wage costs run at about 40% of revenue across New Zealand hospitality, the only industry-wide figure published either side of the Tasman, and Skai Solutions benchmarks against that rather than the 30% rule of thumb imported from North America. Four dollars in every ten is the starting point, and where you sit inside it depends on whether the hours you roster are hours you can actually schedule.
The Restaurant Association of New Zealand 2025 Hospitality Report puts wage costs at about 40% of revenue, on total industry sales of NZ$15.99 billion for the year to June 2025, up 1.4%. That is an industry-wide figure covering cafes, restaurants, caterers, bars and fast food together, published by the industry body rather than by a software vendor.
There is no equivalent single published percentage for Australia. What Australia has instead is the wage side of the ratio in unusual detail. The Fair Work Commission Annual Wage Review 2026 raised modern award minimum wages 4.75% from 1 July 2026, taking the national minimum wage to A$26.44 an hour, or A$33.05 for an award-free adult casual once the 25% loading is applied. The ABS Wage Price Index recorded annual wage growth of 2.8% in Accommodation and Food Services for the June 2026 quarter, against 3.2% across all industries. In New Zealand the adult minimum wage has been NZ$23.95 an hour since 1 April 2026, per MBIE.
Read those two together and the picture is specific: award minimums rose 4.75%, but measured wages in the sector rose 2.8%, slower than the economy. Hospitality is not bidding wages up. It is absorbing a floor that moved.
The 30% figure that circulates widely is a North American rule of thumb, usually stated without a publisher or a date, and it does not survive contact with a 40% industry average. Treat any benchmark you cannot trace to a named source and a year the way you would treat a supplier price with no invoice.
Total labour cost divided by total revenue, both for the same period, both excluding GST. The word doing the work is "total". Run the sum the other way and it tells you how many staff a cafe can actually afford, in paid hours rather than in bodies.
| Include | Australia | New Zealand |
|---|---|---|
| Gross wages, including casual loading | Yes, 25% loading for award-free adult casuals | Yes |
| Employer retirement contribution | Superannuation | 3% minimum KiwiSaver |
| Leave and public holidays | Yes, accrued not paid | Yes, holiday pay |
| Statutory levies | Payroll tax where applicable | ACC levies |
| Owner's own hours | At replacement cost, always | At replacement cost, always |
| Agency and contract staff | Yes | Yes |
Two mistakes account for most wrong answers. Leaving the owner out flatters a small venue by several points and hides the fact that the business cannot afford to replace its operator. Using paid leave rather than accrued leave moves cost between months and makes the ratio jump for no operational reason.
Calculate it weekly, not monthly. Monthly hides the service where you were overstaffed, and the service is where the decision lives.
Work down this list in order. It is ordered by how quickly each one moves the number against how much damage it does.
Check the denominator first. A high ratio is as often a revenue problem as a roster problem, and cutting hours on a quiet Tuesday moves the percentage by almost nothing while making the shift unpleasant.
Find the hour, not the shift. Sales per labour hour, worked out for each hour of trade for two weeks, usually shows one or two hours a day carrying the overrun. Fixing those beats cutting a whole shift.
Look at what your fixed roles actually do. A person rostered mainly to cover the phone during a rush is the most expensive way to answer it. Cover the dinner peak properly, 5pm to 9pm seven nights, and that is 28 hours a week, about 121 hours a month. At the A$33.05 casual rate that is roughly A$4,000 a month before superannuation, penalty rates or leave. In New Zealand at NZ$23.95 plus 3% KiwiSaver it is roughly NZ$2,990 a month before holiday pay. Those hours and that arithmetic are Skai Solutions' own, shown so you can substitute your own roster.
Cut price rises last. With award minimums up 4.75% and measured sector wages up 2.8%, a venue holding menu prices flat is choosing to absorb the gap.
Labour is only half the pair. The other half is what you buy to sell, and Australia has a published band for it: see what a good food cost percentage is for a restaurant, where the tax office puts cost of sales at 32% to 39% of turnover for small restaurants and 34% to 42% for cafes. And before you conclude that a high labour ratio means you cannot find people, check the vacancy data in how bad the hospitality staff shortage in Australia really is, because the official numbers say something different from the headlines.
It should, and a lot of venues leave it out. Workers compensation is charged as a straight percentage of your total wages, 2.250% for a NSW cafe or restaurant, so it moves with every hour you roster and belongs inside the labour line rather than beside it. On a A$400,000 wage bill that is A$9,000 a year, and it is set out with the rates for pubs, clubs and takeaways on restaurant insurance cost in Australia. Superannuation and payroll tax behave the same way.
The labour line is also what decides whether a catering job was worth taking, since catering hours are weekend and evening hours at award penalty rates. We have priced that out on our page on how much to charge for catering.
Labour cost percentage is the ratio that decides whether a fixed monthly cost is worth buying. When four dollars in every ten already goes to wages, the useful question about any tool is not "is it cheap" but "does it replace an hour you are currently rostering, or add to it".
Answering the phone during service is the clearest case of a task that is expensive to roster and impossible to schedule, because calls arrive exactly when the floor is busiest. A fixed monthly cost that does not rise in a busy December behaves differently in this ratio from an hourly one that does. That is the honest argument for the category, and it is an argument about your roster rather than about technology.
The full price comparison against a rostered person is published for Australia and New Zealand, with the arithmetic shown rather than asserted. If you want the older alternatives priced, see phone answering service cost in Australia or the New Zealand version, and what an AI receptionist costs a month for the category that behaves like a fixed cost rather than an hourly one. The other measurable leak on the same P&L is no-shows, which for Australian venues runs at a recorded 1.41% of bookings.
Wage share of revenue and industry sales: Restaurant Association of New Zealand 2025 Hospitality Report. Australian minimum wages and the 4.75% increase: Fair Work Commission Annual Wage Review 2026, effective 1 July 2026. Sector wage growth: ABS Wage Price Index, June quarter 2026, published 19 August 2026. New Zealand adult minimum wage NZ$23.95 from 1 April 2026: MBIE. Roster hours and monthly totals are Skai Solutions' own worked example.
The percentage is only half the picture. To turn it into a roster you need the actual hourly rates, which changed on 1 July 2026: see the hospitality award rates table for 2026 for every level, the weekend penalties and the late night loadings. If your question is which level a given person actually sits at rather than what the level pays, the classification test and the cost of getting it wrong are on our page covering hospitality award pay levels.
For the New Zealand rates behind that ratio, see hospitality wages in New Zealand. For what happens to the roster when someone drops out, see what to do when restaurant staff call in sick.
Labour sits alongside cost of sales and rent. To see how the three add up against the published averages, read what a normal restaurant profit margin looks like in Australia.
Training and certification sit inside that labour line too. Food handler certificate cost in Australia puts a number on it.
A wage rise only hurts if it is not recovered. The market recovered 4.7% of it on the menu over the year to July 2026: see how much restaurant prices have gone up.
Fifteen minutes, your menu, your numbers.
Book a Free DemoThe biggest single lever inside that percentage in Australia is the casual mix, because casual loading adds 25% to every rostered hour. That page prices it level by level from 1 July 2026.
Wages are the larger and more volatile half of prime cost, which is the figure that decides whether a week made money. What a good restaurant prime cost looks like in Australia adds this number to cost of sales and gives the ATO band for each turnover tier. Before you add a shift to buy a second sitting, read table turnover in a restaurant, because turnover improves on paper whether or not the extra labour paid for itself.
If the wage side of this is what pushed you to look at the phone in the first place, our AI receptionist page explains what the category does, what it does badly and who should not buy one.
About 40% of revenue is the published industry benchmark for New Zealand hospitality, from the Restaurant Association of New Zealand 2025 Hospitality Report. There is no equivalent single published figure for Australia. The 30% rule of thumb quoted widely is North American and usually appears without a publisher or a date.
Gross wages including casual loading, employer superannuation in Australia or the 3% minimum KiwiSaver contribution in New Zealand, accrued leave and public holidays, payroll tax or ACC levies, agency staff, and the owner's own hours costed at what it would take to replace them. Leaving the owner out is the most common error.
The Fair Work Commission raised modern award minimum wages 4.75% from 1 July 2026, taking the national minimum wage to A$26.44 an hour, or A$33.05 for an award-free adult casual once the 25% casual loading is applied. Check your specific award for classification rates above the minimum.
The adult minimum wage has been NZ$23.95 an hour since 1 April 2026. On top of that sits the 3% minimum KiwiSaver employer contribution, plus holiday pay and ACC levies, so the cost of an hour is meaningfully above the headline rate.
No. ABS Wage Price Index data for the June 2026 quarter shows annual wage growth of 2.8% in Accommodation and Food Services against 3.2% across all industries. Award minimums rose 4.75% over the same period, so the pressure is coming from the floor moving rather than from competition for staff.
Weekly. A monthly figure averages out the service where you were overstaffed, and the individual service is where the rostering decision actually gets made. Sales per labour hour, tracked hour by hour for two weeks, usually shows one or two hours a day carrying the overrun.
Related: what rent should be as a percentage of turnover, and which award covers your venue.
Related: sales per labour hour, the same relationship expressed per hour rather than as a percentage, which is the form you can roster against.