How do you calculate hourly rate for shops?

Asked By: Salvatore Iruretaeguia | Last Updated: 14th January, 2020
Category: personal finance financial planning
4.6/5 (22 Views . 26 Votes)
Develop an 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.

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

You need to find something called your shop rate:

  1. (Expenses + profit) ÷ hours = shop rate.
  2. (Recurring expenses + 1/12 of annual expenses + your salary + staff salaries + contractor fees) × 1.25 = expenses.
  3. 20,000 + 20% = 24,000.
  4. (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.

24 Related Question Answers Found

What is the average machine shop rate?

60 to 80 dollars per hour is the average machine shop rate in most parts of the U.S.. Electricity is and overhead costs play an important role in what a shop is charging. However, the most important factor would be quality and type of shop. Prototype and short run parts are expensive due to set-up times.

What is Chargeout rate?

Charge-out rate. A charge-out rate is typically used to allocate the costs of a resource that is shared among multiple users. Then, the total amount is divided by the total chargeable hours per year to arrive at a charge-out rate. Tradespeople, such as plumbers or joiners, may charge separately for materials used.

How do you calculate break even hourly rate?

To use a simple example: in a sole adviser practice with one support staff, the hourly breakeven rate is calculated by dividing all the costs by the number of hours to be worked each year. The costs include everything: staff wages, rents, professional affiliations, etc. Let's say that these costs are $100,000 a year.

What is the shop rate?

Gross Sales – Materials/number of work days per month/number of production employees/direct man hours per day per employee = shop rate. This gives you your loaded shop rate, meaning overhead and profit are already included. So in my shop a man who makes $25 per hour actually costs me $40 per hour.

How much should a freelancer charge?


Say you'll work for $10 / hour at the VERY LEAST. You won't like it but you'll do it. Now just double that number so you get your freelance hourly rate of $20 / hour.

How much is 40 hours a week?

You have a standard working week of 40 hours (eight hours a day). You also do 12 hours overtime a week for the first 10 weeks of your 17-week reference period. So you would have worked an average of 47.1 hours per week.

How much should I charge for a product?

You should charge $20 to $25 wholesale (to stores) and $40 to $50 retail (on your website). To figure how you should price your products, download the free pricing worksheet below – simply plug in your own numbers and you'll have a range of pricing to start with.

How much do contractors charge by the hour?

Answer: There is no standard rate for general contractors, as it differs from state to state, cities, and counties, but generally, the range that one would expect to pay is between $25.00 - $85.00 per hour.

How much should I charge for tutoring?

Individuals generally charge according to their level of education and experience. Expect to pay $30 to $40 per hour for a high school student, and up to $85 per hour for a certified teacher with top-notch experience. A teacher trained and qualified to work with children with special needs will likely charge more.

What is the hourly rate for a mobile mechanic?


Most independent repair shops charge between $80-$90 per hour and most dealerships charge between $80-$125 per hour.

Why is the dealership so expensive?

That's why service is so expensive. Dealers are not after all in the business of losing money and that's where they make their money. They also have to cover for their other costs such as whatever equipment, software they purchased, their labor costs, and other overheads associated with running a dealership.

How much does Toyota charge for labor?

The mechanic will get paid $15-20 for the job. Parts cost them 1/2 of what they charge, so about $70. So of the $250 they charged, they're looking at under $100 in labor/parts cost.

How much should a car diagnostic cost?

Depending on your region, this figure should sit between $65 and $100. RepairPal reports that a car diagnostic test costs between $88 and $111 before taxes, and Popular Mechanic says it can cost from $20 to $400. As with any financial decision, it's smart to check at least three places before you commit.

What is Labor for a car?

Obviously labor is the work side of the repair and the starting point is the labor rate of the shop. In most cases, the labor rates are between $90 and $120 per hour, depending on the shop and the type of work being done.

How much should I charge for equipment?


$28.84 is the MINIMUM hourly rate you need to charge for your time. Increasingly, the industry is moving to either weekly or flat fees. A weekly fee is how much you charge on a weekly basis to edit something. Using this same formula, and assumptions, your minimum weekly fee would be: 40 * 28.84 = $1,153.60.

How is machine time cost calculated?

Determining Basic Cost
At the simplest level, a machine's cost per hour is equal to its total cost minus its eventual salvage value divided by its total expected life. A machine that costs $25,000 and is expected to last for 17,000 hours before being sold as scrap for $1,500 would cost $1.38 per hour to use.

How is rent on machinery calculated?

To calculate a rental, you would multiply the total cost of a piece of equipment x 5%/month x 13 x 80% to arrive at the estimated annual rental dollars a rental company wants to achieve. By doing this, they would generate a 35% to 40% gross profit, which includes maintenance, insurance and the limited fuel they fund.