Effective labor rate calculator

Your posted rate is what the sign says. Your effective rate is what actually landed. This gives you both, and tells you which of the two gaps — discounting or unsold time — is costing you more. Free, no signup.

Your numbers

Period these numbers cover

Posted labor rate the rate on your board

Labor dollars collected labor only — no parts, no supplies, no tax

Hours billed hours sold on invoices

Hours paid to technicians what payroll actually paid for

What it comes to

Effective rate, per paid hour

—

what one hour of payroll returned

Realized rate, per billed hour

—

what you actually charged

Fill in the four numbers above and the breakdown appears here.

Why two numbers and not one

Most calculators divide labor sales by billed hours, call it the effective rate and stop. That number only sees the invoice. It cannot see the hour you paid for and never sold.

Realized rate = labor dollars ÷ hours billed. Compare it to your posted rate: the difference is discounting, comped work and “I knocked an hour off for him”.
Effective rate = labor dollars ÷ hours paid. This is the one that pays your rent, because payroll runs on paid hours, not billed ones. Waiting on parts, a comeback done for free, a slow Tuesday — all of it lands here and nowhere else.

When the two are far apart, the problem is not your price. It is the hours between them.

What good looks like

There is no national number worth quoting, and anyone who gives you one is selling something. Compare against yourself instead:

Run it for the last three months, one month at a time. The trend tells you more than any benchmark.
Run it per technician if you can. A shop average hides the person who is carrying it and the one who is not.
Watch the two gaps separately. Closing a discounting gap is a conversation with your advisor; closing an unsold-hours gap is a conversation about scheduling and parts.

Nothing you type here leaves your browser. There is no server in this page, no account, and no email box to get past.

This number, kept without a spreadsheet

AutoDX tracks the punch clock, the hours sold on signed estimates and the comebacks on the same screen — so the effective rate, the gap and the per-technician split are simply there, up to date, per person and per month.

See it on your shop