Mobile mechanic labor rate calculator

The formula, written out

Add the pay you want the year to give you to everything the business itself spends in that year. That total is what your labor has to earn, because parts are bought and sold and largely wash through. Then count the hours somebody actually pays you for in a week, multiply by the number of weeks you really work, and divide the first number by the second. The answer is the lowest hourly rate that covers both halves of your life.

Written as one line: pay plus overhead, divided by billable hours in a week times weeks worked, equals the rate. Nothing in it is a market rate, a competitor rate or a recommended rate. It is the rate your own year demands, and knowing it is what lets you decide whether a number somebody quoted you down the road is one you can afford to match.

Billable hours, not hours worked

This is the field that decides the answer, and it is the one people fill in wrongly. A ten hour day is not ten billable hours. Driving between jobs, collecting parts, writing estimates, chasing the customer who has gone quiet, cleaning the van and doing the books are all real work and none of them appear on an invoice. A mobile mechanic loses more of the day to this than a shop technician does, because the driving is the job rather than a commute at either end of it.

The honest way to fill the field in is to look back at a fortnight of finished invoices, add up the labor hours you actually charged, and halve it for a weekly figure. Guessing high here is the most common way this calculator produces a rate that is quietly too low to live on.

Watch what happens when only that field moves. Keep the same pay and the same overhead, and drop billable hours from 25 a week to 20: the year now has 960 billable hours instead of 1,200 to carry the same $96,000, and the rate goes from $80.00 to $100.00 an hour. Nothing about the work changed. Only the honesty of the estimate did.

What to do when the number comes out higher than you charge

It usually does the first time, and the reaction that follows is usually to assume the calculator is wrong. It is not doing anything clever: it is telling you what the year you described costs. There are only four levers, and it is worth knowing which one you are pulling.

You can raise the rate. You can bill more hours, which usually means cutting the unpaid ones rather than working longer, so it is really a scheduling and travel problem. You can cut overhead, which for a van is mostly insurance, finance and fuel, and none of those move quickly. Or you can accept less pay, which is the lever most people pull without ever deciding to.

A fifth option that looks like a rate rise but is not: charge separately for the things you currently absorb. Driving to the job, the diagnostic that finds the fault, the second visit when the part is wrong. Those hours exist whether or not they appear on an invoice, and moving them onto one raises what the year earns without changing the number on your rate card.

About the numbers this page starts with

The four figures the calculator opens with are defaults chosen so the page shows a working example rather than a row of zeros. They are not a survey, a benchmark, or what anybody charges. There is no sourced rate study behind this page, so it does not pretend there is one, and any page that tells you the average mobile mechanic labor rate without naming where the figure came from is worth exactly as much as the source it did not cite.

Replace all four with your own. The pay figure is what you want before income tax. The overhead figure is a year of van payment, fuel, insurance, tools, software, phone and accountant, and it is the one most people underestimate. The two hours fields are the ones that decide the answer.