Car Repair EstimatorMechanic labor rates and labor rate calculator
Updated 2026-09-29 · By the Car Repair Estimator team
Industry data put the average US auto repair labor rate around $132 an hour in mid-2026, with state averages from about $85 to $197. Franchised dealers average more, and collision shops post separate body, refinish, frame and mechanical rates. Use the calculator to work out the rate your own shop needs.
Your labor rate has to cover far more than the technician's wage: rent, insurance, equipment, software, the hours nobody bills, and a profit. Enter your monthly overhead, wages, billable hours and target margin, and the calculator shows the hourly rate that covers them. Then compare it with the market numbers below.
Average labor rates in 2026
| Shop type or rate | Average hourly rate | Source and date |
|---|---|---|
| All US repair shops (national average) | $132 | Tekmetric index, 10,000+ shops, June 2026 |
| Lowest and highest state averages | $85 and $197 | Tekmetric, June 2026 |
| Franchised new-car dealers, customer mechanical | $186 | NADA 2025 annual financial profile |
| Collision shops, body labor (posted) | $86 | National Autobody Research, June 2026 |
| Collision shops, refinish labor (posted) | $85 | National Autobody Research, June 2026 |
| Collision shops, frame labor (posted) | $117 | National Autobody Research, June 2026 |
| Collision shops, mechanical labor (posted) | $163 | National Autobody Research, June 2026 |
The collision figures are rates shops post themselves, not rates negotiated with individual insurers. In that data, mechanical rates at collision shops rose 11.6 percent from June 2025 to June 2026, while body rose 6.2 percent, refinish 4.9 percent and frame 6.4 percent, according to Autobody News. Averages hide a wide spread: the state averages alone differ by more than $100 an hour, and metro and rural shops in the same state can differ too, so treat these as reference points, not targets.
How to calculate your own labor rate
A market average tells you what customers are used to seeing. Your costs tell you what you need. Work it out in four steps, which is what the calculator does:
- Monthly overhead. Rent or mortgage, utilities, insurance, equipment payments, software, advertising, office staff, loaner cars, fuel for a mobile rig and your own draw if you don't pay yourself a wage.
- Technician wages. Include payroll taxes, workers' comp and benefits, not just the hourly wage. For scale, the Bureau of Labor Statistics puts 2025 median pay at $24.34 an hour for automotive service technicians and mechanics and $25.25 an hour for automotive body and glass repairers.
- Billable hours. Not paid hours. A technician on the clock 160 hours a month rarely bills 160. Subtract time lost to comebacks, cleanup, waiting on parts and slow days. Use your actual history if you track it.
- Target margin. Divide your cost per billable hour by (1 minus the margin). For a 20 percent margin, divide by 0.80.
Worked example
These are illustrative inputs, not benchmarks. A two-tech shop has $18,000 a month in overhead and $12,000 in fully loaded tech wages, so $30,000 in monthly cost. Each tech is paid for 160 hours and bills 75 percent of them, so the shop bills 240 hours. Cost per billed hour is $30,000 / 240 = $125. With a 20 percent target margin, the rate is $125 / 0.80 = about $156 an hour. If billed hours drop to 60 percent (192 hours), the same costs need about $195 an hour to hit the same margin, which is why productivity matters as much as the posted rate.
Flat rate vs actual hours
With flat rate, you bill the time a labor guide or estimating system assigns to the job, regardless of how long it actually takes. A fast tech beats the time and the shop earns more per clock hour; a seized bolt costs you, not the customer. ALLDATA distinguishes between "warranty time," the time a factory-trained technician needs on a component still under warranty, and "standard time," the flat rate a non-factory-trained technician needs on an out-of-warranty component as set by independent labor time publishers. Read more in our labor time guide.
With actual hours, you bill the clock. It suits diagnostics, custom work, restoration and jobs no guide covers well, but the customer can't know the final price up front, so give a written range and a not-to-exceed amount.
Most shops mix the two: flat rate for common operations, actual time for diagnosis and one-off jobs.
Separate rates per skill
Body shops rarely run one rate. Common splits are:
- Body: panel repair, remove and install, straightening sheet metal.
- Refinish: prep, primer, base, clear and blend.
- Frame: structural measuring and pulling on a frame machine.
- Mechanical: suspension, cooling, A/C, electrical and ADAS-related work.
- Diagnostic: scanning and electrical diagnosis, often at the mechanical rate or higher.
Separate rates let you price equipment-heavy work, like frame pulls, where it belongs, and show the customer why a paint job and a suspension repair are priced differently. Car Repair Estimator Repair+ lets you set custom hourly rates per skill, so body labor and refinish hours land on separate estimate lines at your own rates.
When to raise your rate
Recalculate at least once a year and whenever rent, insurance or wages change. If your calculated rate is well above your local market, look at billable hours and overhead before assuming you can't compete. If it is well below, you may be leaving money on the table on every job.
Frequently asked questions
What is the average mechanic labor rate in 2026?
Tekmetric's index of more than 10,000 shops put the US average at $132 an hour in June 2026, with state averages ranging from $85 to $197. Franchised dealers run higher: NADA reported an average customer mechanical labor rate of $186 at new-car dealerships.
What do body shops charge per hour?
Collision shops usually post several rates. National Autobody Research data for June 2026 showed average posted rates of $86 for body, $85 for refinish, $117 for frame and $163 for mechanical labor at US collision shops.
How do I calculate my shop's labor rate?
Add up monthly overhead and technician wages including payroll costs, divide by the hours you actually bill in a month, then divide by one minus your target profit margin. The calculator on this page does the math.
What is the difference between flat rate and actual hours?
Flat rate bills a published or estimated time for the job regardless of how long it takes. Actual hours bills the clock time spent. Flat rate is more common for customer-pay work because the customer knows the price up front.
Sources
- Tekmetric - Average auto repair labor rates by state (June 2026)
- NADA - 2025 Annual Financial Profile of America's Franchised New-Car Dealerships
- Autobody News - Labor rate index: mechanical rates rising faster than body, refinish (July 2026)
- US Bureau of Labor Statistics - Automotive service technicians and mechanics
- US Bureau of Labor Statistics - Automotive body and glass repairers
- ALLDATA - Looking up part prices and labor times
Put your rates to work
Set custom hourly rates per skill in Car Repair Estimator and every estimate prices labor your way.
More in for shops
