The Real Cost of Running a Restaurant in 2026: Food, Labor, and the Expenses Nobody Budgets For

Every restaurant owner can recite their prime cost. Food plus labor, ideally around 60% of sales, watched weekly, argued about constantly.

That’s the conversation the whole industry has. Meanwhile, the lines that have moved most over the past five years sit below prime cost, spread across a dozen smaller bills nobody reviews with the same intensity. None feels like a crisis on its own. Together they’re often the difference between a profitable year and a survival year.

The Big Two, Briefly

You know these, so briefly.

Food costs remain well above pre-pandemic levels, and while menu price inflation has cooled, input costs haven’t returned to anything like 2019.

Labor keeps climbing. Average hourly earnings in U.S. food service reached $21.57 as of January 2026, per the Bureau of Labor Statistics, and turnover means many operators pay to train the same position several times a year.

Both are real. Both are also reasonably managed by most operators, because they’re visible every day. The dangerous costs are the ones that arrive as a monthly statement.

The Third-Largest Expense Most Operators Never Budget

Credit card processing is now the third-largest operating expense for a typical U.S. restaurant, behind food and labor, according to the National Restaurant Association, as reported by Payments Dive. Industry interchange fees hit a record $187 billion in 2024, up more than 70% since before the pandemic.

Third. Ahead of rent in many operations, and ahead of utilities, insurance, and marketing.

And it scales with success. A restaurant doing $1 million a year at a 2.5% effective rate hands over roughly $25,000, about a full-time wage, with very little negotiating leverage.

Two things are shifting:

• Legally. Illinois’s Interchange Fee Prohibition Act, which keeps card networks from charging interchange on the sales tax and tip portion of a transaction, takes effect statewide on July 1, 2026, after the legislature pushed it back by a year (Illinois Public Act 104-0004). The National Restaurant Association, which backed the law in federal court, frames it as a path other states could follow.
• Operationally. More restaurants use dual pricing or explicit card surcharges. NerdWallet notes surcharge rules vary by state, and some ban the practice outright, so check your local law first.

If you do surcharge, put it on the menu, not just the check. Guests dislike fees that appear at the end far more than higher menu prices.

The Rest of the Iceberg

The expenses that have grown fastest and get audited least:

1. Insurance. General liability, property, and workers’ comp premiums have risen sharply in most markets. It’s an annual renewal, so the increase gets accepted rather than shopped.
2. Third-party delivery commissions. Often 15–30% of the order. It’s a variable cost dressed as a marketing channel, and its true cost only shows when you compare margin per order across channels.
3. Utilities. Commercial kitchens are energy-hungry, and inefficient equipment is a bill you pay monthly without seeing why.
4. Waste hauling and compliance, rising where organic waste rules have taken effect.
5. Software, which has grown from almost nothing to a real number in about a decade.

Software Creep Is Real, and Most Operators Never Audit It

Ten years ago a restaurant’s technology cost was a POS terminal. Now a typical stack includes point of sale, payment processing, scheduling, inventory, reservations, online ordering, loyalty, email marketing, review management, accounting, and a menu tool.

Each is reasonable on its own. Stacked, they routinely run to hundreds or a couple of thousand dollars a month at an independent restaurant, money that shows up on the P&L in a dozen small pieces, none big enough to trigger a review.

The audit is simple: once a year, list every recurring software charge, note what it does, and mark anything duplicated or unopened in three months. Watch for the fees inside the fees, too: setup charges, per-edit charges, annual “update” fees, hardware you’re required to buy, and commissions on sales.

Then ask which tools should cost real money and which shouldn’t. Payment processing and your POS carry real infrastructure. A menu shouldn’t be a meaningful line item. MenuOnGo is a fair example of what that end of the stack can look like: a free plan that works for good rather than expiring, no commission on anything you sell, no new hardware or POS, no app for guests, and no setup, per-edit, or annual update fees. The AI scanner builds the menu from a photo of your current one in a couple of minutes, so the switch costs an afternoon, not a project. In a year when the goal is finding money that’s already leaking, that’s one line you can stop worrying about.

What This Adds Up To

Margins were thin before any of this. The takeaway isn’t to panic about any one line. It’s that the costs you review weekly are already optimized, and the ones you review annually probably aren’t. That’s where recoverable money lives.

The 2026 Restaurant Cost Stack

Cost Category	Typical Share of Sales	Review Frequency in Most Restaurants	Where the Opportunity Is
Food	~28–35%	Weekly	Waste, over-prep, cross-utilization
Labor	~30–35%	Weekly	Retention over recruiting
Card processing	~2–3% of every card sale	Rarely	Renegotiation, dual pricing, state law changes
Rent and occupancy	~6–10%	At lease renewal	Negotiation timing
Insurance	~1–3%	Annually	Shopping the renewal
Third-party delivery	15–30% of those orders	Rarely, by channel	Shifting volume to direct
Utilities	~3–5%	Monthly, passively	Equipment efficiency
Software stack	~1–2%	Almost never	Annual audit; drop duplicates and hidden fees

Frequently Asked Questions

What are the biggest costs of running a restaurant in 2026? Food and labor remain the largest, together typically around 60% of sales. Credit card processing has become the third-largest operating expense for a typical U.S. restaurant, according to the National Restaurant Association.

How much do restaurants pay in credit card fees? Effective rates are usually in the low single digits of each card sale, which adds up fast. Industry-wide interchange fees reached a record $187 billion in 2024, up more than 70% since before the pandemic.

Are restaurants allowed to add a credit card surcharge? It depends on the state. Some allow surcharging with disclosure, others ban it, and card networks set their own caps. Confirm the rules in your state first.

How much should a restaurant spend on software? There’s no universal benchmark, but a typical independent’s stack can run several hundred to a couple of thousand dollars a month across many subscriptions. An annual audit for duplicates, unused tools, and hidden fees is worth an hour.

What hidden fees should restaurants watch for in software contracts? Setup fees, per-edit or per-change fees, annual update fees, required hardware purchases, and commissions on sales. Ask about each before signing.

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Sources: U.S. Bureau of Labor Statistics, Illinois General Assembly (Public Act 104-0004), National Restaurant Association, Payments Dive, NerdWallet. Images: Pexels (free to use). Data current as of October 2026.