Pricing labour: what your effective hourly rate actually is
Your posted hourly rate isn't what you earn per bay hour. Here's the calculation, and what to do when the number surprises you.
The number on the sign out the front is a ceiling. The effective rate, per bay hour of technician time, is almost always lower.
The two rates
The posted rate is what a customer pays per hour on a quote. The effective rate is your labour revenue for a period, divided by the total bay hours you logged in that period. It nets out every discount, every unbilled minute, and every hour a technician was on the clock but not on a job.
The rough calculation
Take last month's labour revenue. Divide by the total bay hours logged. Compare against your posted rate. The gap is the money you're not collecting.
Where the gap opens
- Time logged on a job card that never made it onto an invoice.
- Quotes discounted on the counter to keep the job.
- Diagnostic time not billed because the fault wasn't found.
- Setup, pack-down and wait-for-parts time between jobs.
What to do about it
- Make time logging non-optional. Every bay hour tied to a job card, always.
- Set a rule for counter discounts: named reason, or it doesn't leave the door.
- Bill diagnostic time as a line item on every quote, whether it lands the work or not.
- Track effective rate weekly, not monthly. Trends show up faster and you can fix them faster.
Where Marlin fits
Marlin Workshop's business planner shows effective rate against posted rate for any period, split by technician and by bay. Marlin GTX shows the same view at the front counter.
Book a demo and we'll run it on your last month's numbers before you commit to anything.