Labor Rate Calculation?

Ryan Diagnostician New Milford, New Jersey Posted   Latest  

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

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Harley Owner/Technician
Kansas City, Kansas
Harley Default
 

automotivemanagementnetwork​.​com/forums/categor… This is a good place to start reading.

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Albin Diagnostician
Leavenworth, Washington
Albin Default
   

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

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Randall Owner/Technician
Kalkaska, Michigan
Randall Default
 

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

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