🇦🇺Australia

Labour Cost Overrun

3 verified sources

Definition

Mismatch between labor scheduling and sales forecasting causes chronic overstaffing, driving up labor costs which represent a significant portion of restaurant expenses.

Key Findings

  • Financial Impact: AUD 25-35% of revenue in excess labour costs[1][2][3]
  • Frequency: Daily shifts, compounded monthly/quarterly
  • Root Cause: Manual sales forecasting fails to predict demand accurately, leading to excess staffing

Why This Matters

The Pitch: Australian restaurants waste 25-35% of revenue on labour due to poor scheduling vs forecasting. Automation of demand forecasting eliminates overstaffing risks.

Affected Stakeholders

Restaurant managers, Owners, Operations directors

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Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Understaffing Revenue Loss

AUD 5-15% revenue loss from reduced table turnover and lost sales[3][2]

Payroll Tax Threshold Breaches

AUD 4.75-6.85% payroll tax on wages exceeding state thresholds (e.g., AUD 1.5M NSW)[logic: state rates]

Customer Churn from Wait Times

AUD 2-5% customer churn from wait times (industry standard)[3][7]

BAS/GST Lodgement Penalties from Reconciliation Errors

AUD 2,500–8,000 per annum (penalties + correction labour); minimum ATO penalty for understated GST: AUD 1,000–5,000 per quarter if caught in audit

Employer Tip Retention & Wage Theft Liability

AUD 5,000–80,000 per venue annually in retained tips (assumes 10–20% tip withholding on AUD 500k–1.5M annual revenue); potential GST reassessment: 10% of retained amount; Fair Work remediation costs: AUD 2,000–50,000 per claim (legal + settlement).

Manual Tip Reconciliation & Payroll Processing Delays

AUD 3,000–12,000 annually per venue in labour overhead (10–20 hours/month × AUD 25–40/hour payroll processing rate); STP late-lodgement penalties: AUD 200–1,000 per missed deadline (potential 12–24 instances per year for high-turnover venues); rework/dispute resolution: AUD 1,000–5,000 annually.

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