How to use this labor rate calculator
- Highest hourly rate paid: Your top tech’s hourly pay.
- Benefit %: What benefits cost you as a percent of wages (taxes, insurance, PTO, etc.).
- Overhead %: Your shop overhead target (office, trucks, phones, rent, admin, software).
- Desired profit %: The profit you want baked into your labor rate.
- Daily hours billed: What the tech bills on an average day (billable hours).
- Daily hours paid: What you pay them for on an average day (includes drive time, parts runs, non-billable).
- Annual bonus: Highest annual incentives/bonus you pay a tech.
- Annual hours worked: Typical hours worked in a year (often 2,080).
- Club discount %: The discount you give members. This calculator shows the non-member labor rate needed to still cover that discount.
Enter your numbers and hit “Calculate Labor Rate”.
Example for this calculator
You charge $125/hr labor because “that’s what everyone charges.”
You run the calculator and it spits out:
- Club member labor rate: $138/hr
- Non-member labor rate: $162/hr
Now you’ve got a real answer: at $125/hr you’re likely eating overhead and profit without realizing it, and your club discount is making it worse. This helps you set labor rates that actually cover payroll, overhead, and profit, instead of guessing.
