Skip to content

Free tool

Shop Labor Rate Calculator.

Find the hourly rate that covers your costs and pays you. Free, no signup.

Calculator

Everything it costs to run the shop for a month: rent, all wages including techs, insurance, utilities, software. Leave out parts you resell.

Technicians who bill labor.

Hours each tech is on the clock and available for work.

Hours billed to customers ÷ hours on the clock, as a percentage.

Share of labor revenue you want left as profit after overhead. Must be below 100%.

Runs in your browser. Nothing you enter is stored or sent unless you ask us to email your results.

Your rates

Fill in all fields and press Calculate to see your rates.

How it works

The formulas, in plain English

No black box. These are the exact steps the calculator uses.

  1. 1. Monthly billable hours

    = techs × paid hours per tech per week × (52 ÷ 12) × efficiency

    The hours your shop can actually bill to customers in an average month.

  2. 2. Break-even rate

    = monthly overhead ÷ monthly billable hours

    The lowest rate per billed hour that covers your costs, with nothing left over.

  3. 3. Recommended rate

    = break-even rate ÷ (1 − desired profit margin)

    The rate per billed hour that covers your costs and leaves your margin as profit.

  4. 4. Effective rate

    = recommended rate × efficiency

    What the shop actually earns for each hour a tech is on the clock, at the recommended rate.

52 ÷ 12 converts weekly hours to an average month. Percentages are used as fractions (85% = 0.85).

Questions, answered

What should I include in monthly overhead?

Everything it costs to run the shop for a month: rent, all wages including your techs, insurance, utilities, software, equipment payments and so on. Leave out the cost of parts you resell. Your parts markup covers those.

What is tech efficiency?

Hours billed to customers divided by hours the tech was on the clock. If a tech is paid for 40 hours and bills 34, efficiency is 85%. Flat-rate techs can be above 100%.

Why is the effective rate lower than the recommended rate?

Your posted rate is earned only on billed hours. When efficiency is below 100%, some paid hours aren't billed, so the shop earns less per clock hour than the posted rate.

Is profit margin the same as markup?

No. Margin is the share of revenue left as profit. This calculator uses margin: a 20% margin divides break-even by 0.8, which is a 25% markup on cost.

Do you save what I enter?

No. The calculator runs entirely in your browser. Nothing you type is sent to us unless you choose to email yourself the results.

Put your new rate to work

OnixDesk builds your estimates, work orders and invoices. See pricing. No contracts, no setup fees.

From $20 a month. No contract, no setup fee.

Use Alex, built in, or connect the AI you already use.

Get early access

Every plan starts with a 14-day free trial. No credit card.