# How do you calculate hourly rate for shops?

**hourly shop rate**: (total annual labor costs + taxes + benefits + paid time off) / (total annual hours worked – breaks and training time). This is your direct labor cost per hour.

Similarly, you may ask, how is shop rate calculated?

**You need to find something called your shop rate:**

- (Expenses + profit) ÷ hours = shop rate.
- (Recurring expenses + 1/12 of annual expenses + your salary + staff salaries + contractor fees) × 1.25 = expenses.
- 20,000 + 20% = 24,000.
- (20,000 + 4,000) ÷ 160 = 150.

Secondly, how much do car shops charge per hour? Most independent repair **shops charge** between $70-$90 **per hour** and most **dealerships charge** between $80-$125 **per hour**. If you find **a** good repair **shop** that you **can** trust to **do** great work and give you excellent service, then be happy to pay them their rate and take your **cars** to them whenever you need them serviced.

Also question is, how do you calculate charge per hour?

Divide the total by total chargeable **hours per** year to arrive at a **charge**-**out rate**. This is the price **per hour** you **charge** customers.

What is the formula for calculating labor cost?

**To calculate** the number, multiply the direct **labor** hourly rate by the number of direct **labor** hours required to complete one unit. For example, if the direct **labor** hourly rate is $10 and it takes five hours to complete one unit, the direct **labor cost** per unit is $10 multiplied by five hours, or $50.