3 min tool

Garage Labour Rate Calculator

Work out what hourly labour rate your workshop needs to cover costs and profit.

Useful for

Checking if your current hourly labour rate is too low
Planning a rate increase before updating invoices or job sheets
Understanding how non-billable time affects workshop profit

Example labour rate check

If weekly overheads are £850, technician cost is £650, target profit is £500 and there are 28 billable hours, the target labour rate is about £71.43 per hour.

Billable hours

Break-even

£53.57/hr

Target rate

£71.43/hr

Target profit

£500/wk

A labour rate should not be guessed. It needs to cover the real cost of opening the workshop, paying staff, lost non-billable time and the profit the business needs to stay healthy.

Use this calculator as a quick sanity check. Enter your weekly costs and realistic billable labour hours, then compare the target rate against what you currently charge.

Want labour and profit tracked per job?

Mechanics Hub lets you record labour on job sheets and invoices, then keep profit and margin visible internally without showing it to customers.

Start free See digital job sheets

How to use the labour rate calculator

Enter the hours you realistically invoice in a week, your weekly overheads, what your technicians cost you each week, the profit you want each week and the rate you charge now.

The calculator shows your break-even rate, the rate that hits your profit target, what you earn at your current rate and how far above or below the target that leaves you each week.

The formula, with a worked example

Break-even rate = (weekly overheads + technician cost) ÷ billable hours. Target rate = (weekly overheads + technician cost + target profit) ÷ billable hours.

Take a workshop with £850 a week of overheads, £650 a week of technician cost, a £500 weekly profit target and 28 billable hours. Costs are £1,500, so break-even is £53.57 an hour. Adding the profit target makes £2,000, so the target rate is £71.43 an hour.

At £70 an hour the workshop brings in £1,960 a week from labour, £40 short of its target. Over 52 weeks that is £2,080 a year.

Billable hours make the biggest difference

Hours paid are not hours sold. Quoting, ordering parts, phone calls, cleaning and road tests all take time that rarely appears on an invoice. A technician paid for 40 hours who invoices 28 is 70% efficient.

With the same £2,000 of weekly costs and profit target, the rate you need changes sharply with billable hours:

Billable hours a week	Break-even rate (£1,500 costs)	Target rate (£2,000)
24	£62.50	£83.33
28	£53.57	£71.43
32	£46.88	£62.50
36	£41.67	£55.56

What UK independents charged in 2023

A What Car? survey of 279 independent garages in the Independent Garage Association, reported in April 2023, found an average labour rate of £76 an hour, with wide regional differences. The reports don't say whether the figures include VAT, and rates have moved since, so use them to sense-check your own number rather than to set it.

Area (2023 survey)	Average hourly rate
UK average (279 independents)	£76
South-west London	£141
North and north-west London	£112
Garages within the M25	£105
Belfast	£60
Hull	£58
Chester	£56
Huddersfield	£47

What to include in weekly overheads

Add up the year's costs and divide by 52. Include everything the business pays before it earns anything from parts or labour.

Rent or mortgage and business rates
Insurance, utilities and phone
Equipment finance, servicing and calibration
Software subscriptions and card fees
Waste oil and parts disposal
Accountancy and marketing
Your own wage, if you work in the business

Frequently asked questions

What should a garage include in overheads?

Include rent, insurance, utilities, subscriptions, equipment, waste disposal, card fees and other weekly costs that exist before parts or labour profit.

Should I use total hours worked or billable hours?

Use realistic billable hours. Admin, cleaning, quoting, ordering parts and customer calls take time but are not always invoiced, so using total hours can make the labour rate look too low.

Is this a full profit and loss calculator?

No. It is a labour-rate planning tool. Full profit and loss also needs actual invoices, stock costs, wages, rent and expenses over time.

What is the average garage labour rate in the UK?

A What Car? survey of 279 independent garages, reported in April 2023, found an average of £76 an hour, from £47 in Huddersfield to £141 in south-west London. Rates have moved since, so base your own rate on your costs and billable hours.

How do I work out billable hours?

Start with the hours each technician is paid for, then take off time that is not invoiced: quoting, parts runs, phone calls, cleaning and road tests. If you are unsure, compare a month of invoiced labour hours with hours worked. A technician who is paid for 40 hours and invoices 28 is working at 70% efficiency.