Stop guessing what to charge. Calculate your optimal labor rate based on your actual costs, efficiency, and profit goals.
Monthly shop rent or mortgage payment
Electric, gas, water, internet
Liability, property, workers comp
Leases, maintenance, replacements
Supplies, software, marketing, misc
Including yourself if you wrench
Average across all techs
Per technician (typical: 30-40)
Actual vs. target (typical: 70-85%)
Net profit on labor (typical: 20-35%)
Recommended Labor Rate
$76/hr
Includes 25% profit margin
Break-Even Rate
$61/hr
Minimum to cover all costs
Annual Billable Hours
2,730
2 tech(s) × 26 hrs/week
Track your actual numbers. GearMike automatically calculates your real labor efficiency and profitability from your invoices.
Try GearMike FreeResearch what other shops in your area charge. Your rate should be competitive, but don't race to the bottom. Customers who only shop on price aren't loyal anyway.
Specialized work (diagnostics, European cars, diesels) commands higher rates. Consider having tiered rates for different service types.
Costs change. Review your labor rate at least annually. Small increases (2-5%) each year are easier for customers to accept than big jumps.
A shop with 85% efficiency can afford lower rates than one at 60%. Focus on reducing downtime, improving workflow, and keeping techs productive.
Labor rates vary significantly by location and shop type. In 2024, rates typically range from $80-150/hour for general repair, with specialty shops charging $150-250+. The "right" rate is one that covers your costs and provides your target profit margin.
Labor efficiency measures how much of a tech's available time is actually billed to customers. If a tech works 40 hours but only 30 hours get billed, that's 75% efficiency. Top shops achieve 80-90% efficiency.
Many shops do. Diagnostic work, specialty services, and complex repairs often have higher rates than routine maintenance. Tiered pricing can maximize revenue while staying competitive on basic services.
Review your rate annually at minimum. Most successful shops increase rates 3-5% per year to keep up with inflation and rising costs. Communicate increases clearly to customers and emphasize the value you provide.
GearMike calculates your actual labor efficiency, profitability, and more—right from your invoices. No spreadsheets, no guessing. 100% free.