Labor Rate Calculation?
good afternoon. how are you guys calculating your needed shops labor rate. I have my break even per hour calculated. how are you guys figuring out what your labor rate needs to be off of that number? I'm just trying to check if we need to go up and how much if so. thank you
automotivemanagementnetwork.com/forums/categor… This is a good place to start reading.
Years ago I learned , you do things backwards; you start with what you need for YOUR wages, add to that what YOU need for your retirement, then add in the wages of your staff and the needed cost of doing business. You then calculate your daily, weekly, monthly and yearly gross income and work from there. Oh, one more thing, you need to be keeping track of your numbers at least weekly, and adjust
Ryan The rule of thumb I have used is 70% gross profit on labor. Yearly, I calculate my technicians cost of wages/bonus's and/or spiff's, commission, ect., including vacation/holiday(not including taxes, work comp, benefits or "other" wage associated costs). The calculation I am looking for is their wage "cost per billed hour". We measure billed hours accurately, so we take their total wage