Shop Labor Rate

What's your houlr labor rate and where are you located? We're currently at $95 in Texas

Hi Spencer, I'm in the Richmond/Rosenberg area here in Texas. Our labor rate is at 78 an hour. I strongly feel that labor rate highly depends on the area of town that you are in and how much overhead you have. 

116 in Austin

We are in Covington LA, about 35 miles north of New Orleans, LA. Our labor rate is $112. Have been $112 for 2 years and have been thinking about bumping it up to $115.


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We are at $109.75 here in Phoenix AZ

$105 Louisville Ky. Will be doing area checks in the next 2 weeks. Looking to go up. $110 - $115  

$80 for maintenance.$105 General. $115 for Euro. $121 if customer supplies the parts. Peoria Az.

$99.95 here in Virginia

$68.50 Heavy Duty $90 Bowdoinham, Maine

Wilmington North Carolina, $89/diag rate, 91 Mech. repair, 95 for electrical repair. $110 for vintage VW's and Porsche    

$120 Bay Area, CA and considered to be on the lower end compared to similar nearby performance shops

$120 Chicago suburbs. I can see $130 by the end of the year.

I think in the near future we will be going thru a major industry change. I think labor rate will go up substantially.....like 30%. There is a major tech shortage out there and the ones who will win will be able to compensate their people properly and that's going to take a lot more $$$ and a change in how we currently compensate techs. (flat rate)

Of all the industry speak I hear all shops including so called good ones are having difficult times finding employees. Business has been really really good....but we can't keep up.

I completely agree with the change coming. With a shortage of Techs the industry will need to raise wages to get people interested in the trade. I’m trying to stay ahead of the curve.  

Local dealer has an add out with a $10,000 signing bonus. I had seen $1500 - $2500 in the past two years and have had trouble finding 2 good tech's myself but things must be worse than I thought.

I like seeing this, the industry has been low for years, our techs are valuable and we pay them well  

We are in Marin county our labor Rate is 155.00. The near by dealers are at 175.00,

i am considering a thee dollar bump because of recent expenses. 

Tony. 

$125 and thinking of going up- eastern Long Island ny

$85 Charleston, WV

https://www.ratchetandwrench.com/articles/4841-how-to-price-to-gain-customer-loyalty

This was a good read concerning this topic.

Ankers auto service Schenectady NY 99.90  and 119.00 if customers own parts. I am one of the highest in the area.

$110 Framingham, Massachusetts 

I have also been dabbling with the idea of raising our labor rate. I'm just kind of worried about future customers not returning because of that.

My experience in the past two years I went from $85 - $95 then $95 - $105 my car count has increased.  Industry standard is around 2 hrs per RO I think. So if you raise your rate $10 per hr the increase average is about $20. If a customer doesn’t come back over $20 either you don’t want that customer or you haven’t built enough value into your repairs or service.

We are at 79.99 - $104 . 99 

$99.50 Upstate South Carolina. Also up the time accordingly. Holding high gross profit.

We are just outside of Pittsburgh, PA and recently raised our rate to $100. But we tend to adjust it down if the bill seems too high. Probably not a good practice on our part but we aren't in an affluent area so we try to take care of people if we can. The average rates in our area are $80-$110.

I'm in Bakersfield CA and our rate is $126.57, $110 for first time customers, $96.50 for initial testing time, $189.86 is they bring their own parts. We are definitely the highest in town, by a long shot, and we pay our techs probably the highest in town. I actually want to pay the highest in town and I want everyone to know it.

We've struggled with parts margins and overall GP% and I wonder how you all hit your GP goals with such low labor rates. Not being sarcastic, I really wonder. I'd like to know what labor and overall GP percentage you're hitting with those labor rates.

I’m really surprised to see a sub $130 rate in California and to hear it’s among the highest. You mentioned labor GP %. The cost of living and going rates for tech’s from each of our areas I’m sure is different so that will have an effect.

I like the fact you are paying top dollar for techs. I’m moving in that direction and the only way I can do that is to continue to raise my labor rates. I wont actively poach other shops, but I wouldn’t mind if word got out that we have a great place to work, good car count and we pay well. If anyone has looked for techs lately you know they are hard to find. I believe anyone who wants to survive in the coming years is going to have to raise their rates a significant amount to retain your current tech’s or attract new ones.   

We're in the central valley of CA, so more of a midwest economy than SoCal and the bay area. We have among the lowest home prices in CA. We are the highest, the shop across the street from us has a $90 labor rate, a couple of my friends who own shops are at $98. I just decided I need to charge what we're worth regardless of what anyone else did. In the last few years we went from $89 to $126.57, and we've grown 30+% per year for the last 4 yrs. I'm pretty convinced that labor rate is a state of mind. If we're going to attract the type of techs we'll need in the future, we better make it an attractive, relatively high paying job, and to do that we need to charge enough for what we do. I learned that nothing bad happens by raising the labor rate. We had a strategy, we kept initial test time lower so we don't have to discuss a higher rate, and we avoid quoting rate...way too many ways to nicely and credibly side step the issue...and if we must quote a rate we quote our average rate (effective rate). We also price frequent services, like oil changes, brake jobs, trans service, etc, at competitive prices...what we call comparables. And, we focus on the customer having a great experience. I know every one of you could raise your labor rate $10 tomorrow and nothing would happen.

When you say you've grown 30+% I'm assuming you mean in sales and not car count, hours billed or some other metric. It's logical that you would have a big increase in sales if you raised your labor rate 42+%. So your car count and hours billed might not actually change, you're just making more for the same work. And that ain't a bad thing.

Good point. One of the things we did to build car count was go to cheap oil changes, which dropped our ARO. We've worked hard to get ARO and GP up to where it should be, and we're finally having a very good year in GP and net. From 2013 to YTD 2017 we grew an average of 33.5% per yr in gross sales, 35% in car count, and 27.5% in hours billed. And at the same time raised our labor rate from $89 to $126.57.

I started my shop from scratch 7 yrs ago with me and a partner. I bought him out in 2013. I now have 8 employees plus me, and I don't work in the shop. I'm only saying this stuff to encourage others to not be afraid to raise your rates. When my partner left I was afraid to raise the labor rate, and I worked my ass off and didn't make any money. Then I was challenged to raise the rate and I did, then raised it again, and again, and again, in both big jumps and small jumps. Nothing happened, and we kept growing. If I can encourage some of you to just raise the rate then we're all better off. Friendly service and marketing matter, price is very minor.

When you mention paying your techs "well", would you care to share what dollar range that is? I think our highest paid tech non equity individual is paid "very well". Is anyone paying more than 80k a year?

I might add that we are in southern IL and labor rate is $74.97 for our average labor rate.

On 1/1/2018 at 10:33 PM, Silas Martin said:

When you mention paying your techs "well", would you care to share what dollar range that is? I think our highest paid tech non equity individual is paid "very well". Is anyone paying more than 80k a year?

That, in my opinion is "very well"!  I can't imagine how you pay a tech 80K/year with a labor rate as you stated of $74ish. How is there any left for you or expenses? Next question; Are you hiring? lol.

All in, my guys get over $80k per year.  That includes the whole picture, salary, tool allowance,  health care, IRA contribution etc...  We're in Westchester County NY and the labor rate is 113 and going up.  I can't  seem to attract techs either.  Maybe I'm not looking in the right places, maybe not offering enough, maybe no one is out there...  I wish I had the answer.  One thing i do know... my labor rate will be higher this week and I'll be paying closer attention to parts margins.