Management Tip added to the Premium Member area
# 224 – Your Labor Rate to Technician Pay Ratio Must Work
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I agree with the 25 to 30% range. But it has nothing to do with your posted labor rate. It needs to be based on your effective labour rate. What did you actually invoice out in dollars per hour for all the hours that transpired. Many shops have a low effective labor rate because they do too many stand alone oil changes, don’t charge for inspections and diagnosis, and don’t add time for rust, age and condition of the vehicle.
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