How do I figure out my shop's labor rate?

Divide a month's costs by the hours you bill in a month, then divide that by one less your target margin.

What should my labor rate be for a 50% margin?

Twice what a billed hour costs you. An hour that costs $60 needs $120.

Billed hours: the hours on invoices. That is what the shop is paid for.

Start from what a billed hour costs you, then add the margin you aim for.

Bay 01

Add up a month's costs: technician pay with payroll taxes and benefits, pay to everyone else, rent, utilities, insurance, equipment payments, software and anything else it takes to keep the doors open.
Leave out parts bought for a customer's car.
Divide by the hours you bill in a month: hours on invoices, not hours on the clock.

Bay 02

Divide that cost by one less the margin.
A billed hour that costs $60 needs $120 an hour for a 50% margin: 60 ÷ (1 − 0.50).

Bay 03

Multiply a week by 4.33.
Billed hours a month = billed hours a week × 4.33.
Technician pay a month = technicians × paid hours a week × 4.33 × wage per hour.

Bay 04

It is not a price to charge. It is your own costs worked through.
It counts every cost against labor alone, so profit on parts is not taken off it.

Bay 05

Bay 06

In the app, Reports › All reports › Shop rate works it out from your own pay, hours and costs.

Bay 07

How do I figure out my shop's labor rate?
Divide a month's costs by the hours you bill in a month, then divide that by one less your target margin.
What should my labor rate be for a 50% margin?
Twice what a billed hour costs you. An hour that costs $60 needs $120.
Do I count clock hours or billed hours?
Billed hours: the hours on invoices. That is what the shop is paid for.