Report: Full-service restaurant wages up 74% since 2017
Wages and inflation are both up at full-service restaurants more than their quick-serve competitors.
That’s according to business point-of-sale system Square’s Quarterly Restaurant Report. The report notes when tracking average hourly earnings (inclusive of base pay, tips, and overtime), wages for full-service workers have grown 73.9% — compared to 60.2% for quick-service restaurants — since 2017.
In 2024, Square found the average restaurant worker earns nearly 23% of their income in tips versus 22% in 2023 (nationally). Square observed that the average tip on a restaurant transaction has remained flat for 2024 at 15.4% compared to 15.5% in 2023.
“The cost of labor is growing faster than revenues in some segments, compressing margins in an already tight sector,” said Ara Kharazian, Square research lead and principal developer of Square Payroll Index. “This trend will likely continue. Restaurants are hesitant to raise prices on consumers, but we remain in a pretty hot labor market so wage increases will have to come from somewhere if restaurants want to remain competitive.”
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The report also noted that since February 2020, full-service restaurants have been hit harder with inflation compared to quick-service restaurants. Inflation peaked for full-service restaurants in April 2022 at 10.1% compared to 7.2% for quick-service restaurants. Since then, inflation has cooled for both full-service and quick-service restaurants, now at 4.3% and 3.6% respectively as of September 2024.
“Despite inflation easing, restaurants are continuing to face a number of challenges in their operations whether it’s fluctuating food prices, employee retention, or ballooning payroll costs,” said Ming-Tai Huh, head of food and beverage at Square. “Many restaurants are grappling with how to balance these increased expenses while still offering affordability to customers. We’ve seen some restaurants lean on automation and other time-saving technology to keep margins under control.”
