What percentage of the labor rate is fair for the flat rate tech

Joe Diagnostician Midland, Texas Posted   Latest  

Hello everyone I work at a European shop in midland Texas our labor rate is $185. I have been working here for about 4 yr on straight time at $21 /hourly (yeah I know I’ve been shooting myself in the foot! what a dumbass! I’ve decided to go flat rate at $40/hr which is not even 30% of the labor rate is this fair? What do you guys get? Or what do you offer? 

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Doug Owner
Midland, Michigan
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Hi Joe, As a small business owner, (not in the automotive field), the questions are more around what are your costs, what is your profit margin at the end of the day, and what benefits do you offer, if any. Each shop will be different and each must be profitable in order to stay in business. In many cases, just looking at hourly rates without putting them in the context of the business…

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Allan Owner
Sterling, Virginia
Allan Default
 

What benefits do they offer? It’s not all about percentage. A large dealer has large expenses and they have a serious amount of coin invested and need to make a decent ROI or it’s not worth it for them. 30% with great benefits is fantastic. 35-40 percent with crap benefits imo. But once again it’s whats best for them AND you. Can you get more elsewhere?

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Luis Technician
Lake Forest, California
Luis Default
 

$40 flat rate, with a guarantee at $22/hr is a good starting point depending on the area you live and as long there is enough work that you can push at least 50 hrs a week. How many hrs do you normally average per week, you have to do your own research and you would know better than anyone else. How much you normally produce per week. How much experience do you have other than the 4 yrs you have…

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Benjamin Technician
Fairfield, Connecticut
Benjamin Default
 

They gave you a choice? If I had the choice, I'd go back to hourly in a heartbeat. I left the field for 7 years and they dragged me back kicking and screaming.

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Rudy Technician
Montebello, California
Rudy Default
 

Your profile says you have 6 years experience. IMO, you are being paid commensurate with your experience.

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Phillip Diagnostician
Anchorage, Alaska
Phillip Default
 

Most of these guys are pretty much correct. As a new business owner I soon realized that it does cost a lot of money to run a business and I have no employees or a lot of over head. So as being an employee I know it is hard to see that and think places are booming with money. I used to think that way and then looked at the behind the scenes and understood. Then I would ask for what I believed I…

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Jeff Owner/Technician
Salmon, Idaho
Jeff Default
 

As A shop owner you have to take into account ability, the others covered it, If your a tech that turns 40-50 billable hours a week with a low return rate, then I'd go flatrate, if your a guy the boss is always pushing and prays can do 20 billable hours a week, then I guess you should take the 21/hr.

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Bill Technician
Rosetown, Saskatchewan
Bill Default
 

My opinion is that every business if different. I don't think what you are paid should be based on the % of the labor rate. I would like to work as part of a team where everyone on board knows their value and is paid based on the value they provide. The leader should be able to explain in a clear way what the shop needs from it's employees to thrive, and share the success with the team that…

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Dennis Owner/Technician
Salt Lake City, Utah
Dennis Default
 

As a shop owner for over 30 years an owner cannot pay you a percentage of the hourly rate because if he has to raise the labor rate $3.00 an hour to cover more credit card fees or other utilities that may go up it is not possible for him to pay you more as a % of the labor amount because he is not making any more money then before.

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Nelson Diagnostician
Gastonia, North Carolina
Nelson Default
   

You need to do a skill self assessment to see what you have to offer your current shop. What are your strengths/ weaknesses in auto repair? Are you a strong electrical/driveability guy with all the tools to get the job done? Check local job ads, Go on a couple of interviews to see what other shops are offering you. Your tool box has wheels on it for a reason. Best Wishes on what ever you…

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Stephen Educator
Bethel, Ohio
Stephen Default
 

I charge $75 an hour when I work on a vehicle. Out of that my profit when everything is said and done is around $50. It just depends upon what the market will bare. you have to understand the overhead you don't have to pay for. Each bay you use must generate a certain amount of money just to break even. Some of the money you make goes to the service desk. I would think you could probably get as…

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Jamey Owner/Technician
Ventura, California
Jamey Default
 

Wages, just like labor rates are set by the local market. What does your market pay? Shop labor rates have nothing to do with wages. (I know that’s not popular) if the shop rate is $185, because that is the market, so be it. However if the local pay scale will fetch a top notch technician for $40.00 per hour, that’s the market. If you get one for $25.00 per hour and your paying market wages…

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Nate Owner
Santa Cruz, California
Nate Default
 

Joe, Is your shop labor rate really that high? Seems high for central Texas - or else I am behind the times.

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Rudy Technician
Montebello, California
Rudy Default
 

Nate- If your shop rate isnt that high, and youre in CA, (especially that area) yeah Id say its time to bump it up.....

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Louis Mobile Technician
McQueeney, Texas
Louis Default
   

- Howdy! Wow, $185/book hour in Midland, Texas - guess that would be inline for a very specialized shop. But, for such a shop the operating overhead for the owner will be also very high. A little understanding of operating expenses for your shop owner goes along way to realizing if you are in your zone or should be looking elsewhere. - Building/Land Cost - Liability Insurance (European Vehicles…

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Joe Diagnostician
Midland, Texas
Joe Default
 

Howdy, I didn’t respond to any post because I believe I wasn’t clear enough in my question. I have a mortgage and bills as well So I completely understand about overhead and all the expenses of owning a business but when your the shop owner of the only independent euro shop in town and your home, shop, and cars are all paid for and you don’t offer any benefits, insurance, training (because you…

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Luis Technician
Lake Forest, California
Luis Default
 

The shop can charge whatever they want that has nothing to do with what you get paid for. If they pay you $40 flat rate you get $40 an hr per every billed labor hr regardless of what they shop charges they can charge $300 and hr or $80 per hr why would you care. Same thing if the owner has toys big houses trucks all paid off, is none of our business. Now if the owner does not support your…

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Louis Mobile Technician
McQueeney, Texas
Louis Default
 

Yes, that is g Generally how most reputable shops work. But it will be Flat Rate (aka Book Rate). So if the book shows .2 hours and it take you a hour for whatever reason. You loose. If the book shows 1 hour and you do it in 30 minutes, you win! I have heard of shops paying a flat rate to the tech, but then charging the tech of misc. crap that the shop should pay for. Diagnostic time is one…

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Mitchell Service Manager
Hampton Bays, New York
Mitchell Default
 

I learned, years ago, {1979} that "salaries" should be 1/3rd of the labor rate. That doesn't include cost of benefits. Now I know all the business owners will be in a panic with my comments... I owned my own business from …So I've been on both sides... But that was also before, all the independants, went to flaye rate also, because of all the prima-donna's, that can't/wont produce

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