Labor costs

Labor costs refer to the total expenses incurred by businesses to compensate employees for their work. These costs are a crucial factor in financial planning and operational efficiency, especially in labor-intensive industries like HoReCa.

Key Aspects of Labor Costs:

• Direct Labor Costs – Wages, salaries, and bonuses paid to employees directly involved in production or services.
• Indirect Labor Costs – Expenses related to support staff, such as administrative and maintenance personnel.
• Employee Benefits – Health insurance, retirement contributions, paid leave, and other perks.
• Payroll Taxes – Mandatory contributions, including social security and unemployment taxes.
• Training & Turnover Costs – Expenses for hiring, training, and replacing employees due to staff turnover.

Reducing labor costs is essential for maintaining profitability while ensuring high-quality service and productivity.