Mechanic labor rate calculator (shop rate)
The hourly rate your shop needs to charge to cover technician wages, payroll burden and overhead for the hours you can actually bill, with a profit margin on top.
Your numbers
TechniciansThe shop See your resultResult
Labor rate to charge $112.92with a 20% margin Break-even rate $90.34covers cost, no profit Billable hours per year 5,824 h Shop cost per year $526,112 Stop working this out by handFleetZap work orders record each technician’s time with timers, plus parts and outside work, so you see the real hours and cost behind every job.
See FleetZap Maintenance · Try the demoThe formula
Break-even rate = (Wages × (1 + Burden) × Paid hours + Overhead) ÷ Billable hours · Rate = Break-even ÷ (1 − Margin)
With the example: 4 × $32 × 1.3 × 2,080 h = $346,112 in labor, plus $180,000 overhead, over 4 × 2,080 × 70% = 5,824 billable hours, is $90.34 to break even and $112.92 with a 20% margin. Billable share moves the rate more than wages do.
Using the numberWhat to do with it
- Raise billable hours before raising the rate: technicians waiting for parts or hunting for a machine’s history are paid hours you can’t bill.
- In-house fleets can use the same number as a charge-out rate, so a repair is compared fairly with sending it to an outside shop.
- Recheck the rate when wages, rent or the number of technicians change.
Guides behind this calculator
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The heart of FleetZap, and everything a maintenance team needs in one place: work orders and preventive maintenance, inspections and the field app, plus a parts store with purchasing, compliance and certificate tracking, multi-location assets with a full lifecycle, and the KPIs that prove it’s working.
- Work orders
- Preventive maintenance
- Procedures, inspections & field app
- Parts & purchasing
- Compliance
- Assets, reports & KPIs
Good to know
How do you calculate a shop labor rate?Add technician wages with payroll burden and the shop's overhead for a year, divide by the hours you actually bill, then add your margin.
Why can't all paid hours be billed?Technicians also train, clean up, wait for parts and look for information. Many shops bill well under all paid hours, which is why billable share moves the rate so much.
Should an in-house fleet shop have a labor rate?Yes. A charge-out rate lets you compare an in-house repair fairly with an outside shop and puts a true labor cost on every machine.
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