Auto repair & detailing
Mechanic Labor Rate Calculator
Work out the labour rate a mechanic's time has to be sold at once burden, unsold hours and overhead are recovered.
Result
The billable share is the number most people get wrong. Quoting, driving, chasing parts and fixing warranty callbacks are all paid and none of them are billed, which is why the honest figure is rarely above two thirds.
Get a Free Business AuditWhat moves the number
- The gap between hours paid and hours sold, which is where most rate calculations go wrong.
- Employer burden, which varies by state and by benefit package.
- Overhead per productive hour rather than per calendar hour.
Where this one goes wrong
Treating a 40 hour week as 40 sellable hours. Between holiday, training, downtime and unsold time, the real figure is well below that, and spreading overhead across the larger number understates the rate badly.
Questions
About this calculator
What is the difference between labour cost and labour rate?
Cost is what the hour costs you once burden and unsold time are counted. Rate is what you charge for it. The gap has to cover overhead and the margin you intend to keep.
Should apprentices be rated differently?
Their cost is different, so their contribution is different. Many shops bill one rate regardless, which is defensible commercially but means apprentice hours are subsidising or being subsidised depending on the mix.
Does a flat rate pay plan change the calculation?
It shifts risk toward the technician and changes how downtime is absorbed, but the shop still has to know what an hour costs before it can price one.
The formula
rate = (income + overhead) / (working hours x billable share)
Put this calculator on your site
Free to embed. Paste this where you want it to appear. It stays up to date automatically because it loads from BDEVY.
Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Income you need per year ($). Enter your own figure; the page starts at $85,000.
- Annual overhead ($). Enter your own figure; the page starts at $252,000.
- Working weeks per year. Enter your own figure; the page starts at 48.
- Paid hours per week. Enter your own figure; the page starts at 40.
- Share of hours you can bill (%). Travel, quoting, admin and warranty calls are paid but not billed.
The result updates as you type, so you can try a figure, see what it does to rate you need to charge, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Income you need per year | $85,000 |
| Annual overhead | $252,000 |
| Working weeks per year | 48 |
| Paid hours per week | 40 |
| Share of hours you can bill | 62% |
What comes out
| Result | Value |
|---|---|
| Rate you need to charge main result | $283.10 |
| Billable hours per year | 1,190 |
| Total to recover | $337,000 |
| If every hour were billable | $175.52 |
To take home $85,000 after $252,000 of overhead you need $283.10 per billable hour. Charging $175.52, the figure you get by ignoring unbillable time, leaves you short every week.
How sensitive the answer is
Holding everything else steady and changing only income you need per year, this is what happens to rate you need to charge. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Income you need per year ($) | Rate you need to charge |
|---|---|
| $42,500 | $247.40 |
| $63,750 | $265.25 |
| $85,000 example above | $283.10 |
| $127,500 | $318.80 |
| $170,000 | $354.50 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Income you need per year ($)
- A money amount, starting at $85,000.
- Annual overhead ($)
- A money amount, starting at $252,000.
- Working weeks per year
- A number, between 0 and 52, starting at 48.
- Paid hours per week
- A number, between 0 and 100, starting at 40.
- Share of hours you can bill (%)
- Travel, quoting, admin and warranty calls are paid but not billed.
What the results tell you
| Result | What it is |
|---|---|
| Rate you need to charge | The headline result. A money figure. |
| Billable hours per year | A number. |
| Total to recover | A money figure. |
| If every hour were billable | A money figure. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.