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Set Your Labor Rate

Determine what your labor rate should be based on your costs and profit goals.

65%
50%80%

Loaded Labor Rate

$0.00

Effective Labor Rate (ELR)

$0.00

Retail Labor Rate (+6%)

$0.00
Median Tech Pay: $0.00
40%
10%90%

Loaded Labor Cost

$0.00
65%
50%80%

Projected Effective Labor Rate (ELR)

$0.00
6%
0%20%

Final Retail Labor Rate

$0.00

How to Set Your Auto Repair Labor Rate

Your labor rate isn't just a number you pull from what the shop down the street charges. It should be a calculated decision based on your actual costs, target profit margin, and technician productivity.

The Formula

  • Start with loaded cost: Your true cost per tech hour (wages + benefits + overhead). A common load factor is 1.3–1.5× base wage.
  • Apply target GP%: Door Rate = Loaded Cost / (1 - GP%). Top shops target 70%+ labor GP.
  • Factor productivity: If techs produce 85% of available hours, your effective rate drops accordingly.

Market Context (2024–2026)

  • National average: Independent shop door rates range $135–$185/hr depending on region.
  • Don't compete on price: Shops that undercut competitors sacrifice GP and can't afford A-tech pay.
  • Review semi-annually: Rate reviews every 6 months keep pace with rising insurance, wages, and parts costs.

Benchmarks referenced from leading automotive coaching groups including ATI, Elite Worldwide, Transformers Institute, Shop Fix Academy, 180BIZ, DRIVE, and the Institute for Automotive Business Excellence.

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