{"id":439,"date":"2026-07-15T11:46:11","date_gmt":"2026-07-15T11:46:11","guid":{"rendered":"https:\/\/www.way.com\/repairtech\/blog\/?p=439"},"modified":"2026-07-17T09:10:44","modified_gmt":"2026-07-17T09:10:44","slug":"shop-management-software-labor-rates","status":"publish","type":"post","link":"https:\/\/www.way.com\/repairtech\/blog\/shop-management-software-labor-rates\/","title":{"rendered":"How shop management software handles labor rates"},"content":{"rendered":"<p><span data-contrast=\"auto\">You think\u00a0you\u2019re\u00a0doing everything right. Your\u00a0techs are\u00a0brilliant, and the bays are always full. But at the end of the month, the revenue\u00a0isn\u2019t\u00a0what you expected. You might blame it on the pricing of the parts or even the occasional comebacks. But one of the overlooked reasons is your labor rates.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">You can\u2019t overcharge, and you can\u2019t price it too low. Setting the correct labor rates is a challenge. Once you\u2019ve set your labor rates, tracking them accurately is the next problem. You might also be tempted to set a standard labor rate and call it a day. But a quick oil change shouldn\u2019t cost as much as repairing an AC system, which can take up to three days. This just eats your profits, job after job. <\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">Shop management software is what you need. With this software, managing labor rates is one less thing you\u00a0have to\u00a0worry about.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n<h2 aria-level=\"2\"><b><span data-contrast=\"none\">Why labor rates are hard to get right<\/span><\/b><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:299,&quot;335559739&quot;:299}\">\u00a0<\/span><\/h2>\r\n<p><span data-contrast=\"auto\">On paper, setting a labor rate sounds really simple.\u00a0In reality, it\u00a0isn\u2019t\u00a0so straightforward. A few things make getting the rate right harder than it looks:<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n<ul>\r\n<li><span data-contrast=\"auto\">Techs are\u00a0often not paid\u00a0at the exact time they take on a repair, but rather on a standardized\u00a0\u201cbook time\u201d\u00a0set by industry-approved labor guides.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<li><span data-contrast=\"auto\">The labor guides base\u00a0their\u00a0rate on new cars and don&#8217;t take into account used and older models.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<li><span data-contrast=\"auto\">Labor charges\u00a0don\u2019t\u00a0just include the\u00a0tech\u2019s\u00a0wage but also cover overhead costs such as facility maintenance and utilities.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<li><span data-contrast=\"auto\">Manual tracking using paper, sticky notes, whiteboards, and paper cards causes errors, which end up taking too long to work out.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<h2 aria-level=\"2\"><b><span data-contrast=\"none\">How shop management software helps<\/span><\/b><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:299,&quot;335559739&quot;:299}\">\u00a0<\/span><\/h2>\r\n<p><span data-contrast=\"auto\">Most <strong><a href=\"https:\/\/www.way.com\/repairtech\/\" target=\"_blank\" rel=\"noopener\">shop management platforms<\/a> <\/strong>address labor rate management through a few core methods:<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n<ul>\r\n<li><span data-contrast=\"auto\">Instead of a single universal rate, you can define multiple labor rates by job type, customer type, or vehicle type, so you know\u00a0a\u00a0$60\u00a0quick\u00a0repair\u00a0isn\u2019t\u00a0billed\u00a0the same as a $600\u00a0diagnostic\u00a0job. Once rates are entered in the system, your service advisors can apply the right one to each job rather than manually calculating it or guessing.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<li><span data-contrast=\"auto\">Many platforms let\u00a0technicians\u00a0clock in and out of their individual jobs, giving you the actual time spent versus the billed time.\u00a0You can use\u00a0this feature\u00a0to measure the efficiency of your\u00a0techs and see how profitable each job is.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<li><span data-contrast=\"auto\">You also get detailed reports on labor cost per job, labor revenue by technician, effective labor rate over time, and profit margins.\u00a0So,\u00a0you\u2019ll\u00a0be able to spot when\u00a0the\u00a0labor rates need adjustment.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<h2 aria-level=\"2\"><b><span data-contrast=\"none\">How Way\u00a0Repair Tech\u00a0handles labor rates<\/span><\/b><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:299,&quot;335559739&quot;:299}\">\u00a0<\/span><\/h2>\r\n<p><span data-contrast=\"auto\">When you first open the\u00a0labor\u00a0rates section in\u00a0Repair Tech,\u00a0you\u2019ll\u00a0see\u00a0that the\u00a0\u201cStandard Base Labor Rate\u201d\u00a0is already filled. This is the rate you entered during the onboarding process, and by default,\u00a0it\u2019s\u00a0the only rate the system shows. If your shop charges a single flat labor rate across all jobs and customers,\u00a0you\u00a0don\u2019t\u00a0have to add anything.\u00a0Way Repair Tech\u00a0will\u00a0automatically\u00a0apply\u00a0this\u00a0labor\u00a0rate\u00a0to every estimate it generates, so\u00a0there\u2019s\u00a0nothing else to set up.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p>\r\n<p aria-level=\"3\"><b><span data-contrast=\"none\">Adding multiple labor rates<\/span><\/b><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:281,&quot;335559739&quot;:281}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">Many shops, though,\u00a0don\u2019t\u00a0operate\u00a0at a single rate.\u00a0Different shops have different labor rates based on:<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p>\r\n<ul>\r\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Customer type<\/span><\/b><span data-contrast=\"auto\">:\u00a0Retail and fleet\u00a0don\u2019t\u00a0have the same rate because\u00a0fleet accounts often negotiate a lower or fixed rate.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<ul>\r\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"2\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Vehicle type<\/span><\/b><span data-contrast=\"auto\">:\u00a0The rates for\u00a0European or diesel vehicles\u00a0that\u00a0frequently\u00a0require specialized diagnostic work\u00a0are\u00a0unlike\u00a0the rates\u00a0of\u00a0routine vehicle labor.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<ul>\r\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"3\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Job type<\/span><\/b><span data-contrast=\"auto\">:\u00a0The diagnostic time\u00a0and standard repair time may carry different rates depending on your shop policy or due to\u00a0the\u00a0manufacturer\u00a0agreements.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<p><span data-contrast=\"auto\">With\u00a0Repair Tech, you can add as many labor rates as you\u00a0require. From the\u00a0labor\u00a0rates screen, click\u00a0\u201c+ New Labor Rate.\u201d\u00a0This\u00a0opens a popup where you can enter the rate amount and give it a\u00a0distinct\u00a0name, something like\u00a0\u201cFleet Rate,\u201d\u00a0\u201cDiagnostic Rate,\u201d\u00a0or\u00a0\u201cEuropean Vehicle Rate,\u201d\u00a0so your team can\u00a0identify\u00a0it quickly later. Once you click\u00a0save, that rate is added to your\u00a0shop\u2019s\u00a0list of available labor rates.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n<p aria-level=\"2\"><b><span data-contrast=\"none\">Using an alternate\u00a0labor\u00a0rate\u00a0<\/span><\/b><span data-ccp-props=\"{&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335559738&quot;:160,&quot;335559739&quot;:80}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">For any job that requires a different rate, service advisors and technicians can select the\u00a0appropriate alternate\u00a0rate directly within the Repair Order (RO), applying it to that specific job without affecting the shop\u2019s pricing anywhere else.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n<h3 aria-level=\"3\"><strong>The starting point\u00a0<\/strong><\/h3>\r\n<p><span data-contrast=\"auto\">Setting up\u00a0accurate\u00a0labor rates is the first step, but pricing is only half the equation. Jobs\u00a0don\u2019t\u00a0always go exactly as estimated, and\u00a0Repair Tech\u00a0accounts for that: labor lines on a repair order\u00a0aren&#8217;t\u00a0locked in once\u00a0they&#8217;re\u00a0added. If a job takes longer than expected or needs\u00a0adjusting, you can update the labor cost on that RO.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">From there,\u00a0Way\u00a0Repair Tech\u2019s\u00a0reporting gives you visibility into how your labor rates are performing. You can pull reports on labor costs and rates\u00a0to see the pattern over time and catch it when a rate needs revisiting.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p>\r\n<h4 aria-level=\"4\"><b><i><span data-contrast=\"none\">FAQs<\/span><\/i><\/b><span data-ccp-props=\"{&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335559738&quot;:80,&quot;335559739&quot;:40}\">\u00a0<\/span><\/h4>\r\n\r\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\r\n<div class=\"schema-faq wp-block-yoast-faq-block\">\r\n<div id=\"faq-question-1784113529433\" class=\"schema-faq-section\"><strong class=\"schema-faq-question\"><strong>What\u2019s\u00a0the difference between labor rate and labor cost?<\/strong><\/strong>\r\n<p class=\"schema-faq-answer\">A labor rate is the dollar amount charged per hour for a job (e.g., $150\/hour for diagnostic work). Labor cost is that rate applied to the estimated or actual time for a specific repair.\u00a0<\/p>\r\n<\/div>\r\n<div id=\"faq-question-1784113568028\" class=\"schema-faq-section\"><strong class=\"schema-faq-question\"><strong>Where do labor time estimates come from?<\/strong><\/strong>\r\n<p class=\"schema-faq-answer\">Most shop management software, including Way Repair Tech, pulls standard labor times from industry guides like Motor, which\u00a0set\u00a0an expected repair time for a given job on a given vehicle. This is the\u00a0\u201cbook time\u201d\u00a0used to calculate the labor line on an estimate.<\/p>\r\n<\/div>\r\n<div id=\"faq-question-1784113587911\" class=\"schema-faq-section\"><strong class=\"schema-faq-question\"><strong>Can labor costs be adjusted after\u00a0they&#8217;re\u00a0added to a repair order?<\/strong><\/strong>\r\n<p class=\"schema-faq-answer\">Yes. In Repair Tech, a labor line added to an RO\u00a0isn\u2019t\u00a0final. If a job takes more or less time than expected, or you need to\u00a0apply\u00a0a different rate, you can update it on that repair order\u00a0later.\u00a0<\/p>\r\n<\/div>\r\n<div id=\"faq-question-1784113634389\" class=\"schema-faq-section\"><strong class=\"schema-faq-question\"><strong>How do you calculate\u00a0labor\u00a0rates?<\/strong><\/strong>\r\n<p class=\"schema-faq-answer\">Divide the total cost of labor by the number of productive hours worked.\u00a0\u00a0<\/p>\r\n<\/div>\r\n<\/div>\r\n<\/div><\/div>\r\n\r\n\r\n\r\n<p>Want to see how Way Repair Tech manages labor rates for your shop?<strong> <a id=\"https:\/\/www.way.com\/repairtech\/schedule-demo\" href=\"https:\/\/www.way.com\/repairtech\/schedule-demo\" target=\"_blank\" rel=\"noreferrer noopener\" type=\"link\">Schedule a demo<\/a><\/strong>, and we\u2019ll walk you through it.<\/p>\r\n\r\n\r\n\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<p>&nbsp;<\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>You think\u00a0you\u2019re\u00a0doing everything right. Your\u00a0techs are\u00a0brilliant, and the bays are always full. But at the end of the month, the revenue\u00a0isn\u2019t\u00a0what you expected. You might blame it on the pricing of the parts or even the occasional comebacks. But one of the overlooked reasons is your labor rates.\u00a0 You can\u2019t overcharge, and you can\u2019t price&hellip; <a class=\"more-link\" href=\"https:\/\/www.way.com\/repairtech\/blog\/shop-management-software-labor-rates\/\">Continue reading <span class=\"screen-reader-text\">How shop management software handles labor rates<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":440,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10],"tags":[],"class_list":["post-439","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-shop-management","entry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How shop management software handles labor rates<\/title>\n<meta name=\"description\" content=\"Setting the correct labor rates is a challenge. Learn how Way Repair Tech, shop management software handles labor costs.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.way.com\/repairtech\/blog\/shop-management-software-labor-rates\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How shop management software handles labor rates\" \/>\n<meta property=\"og:description\" content=\"Setting the correct labor rates is a challenge. 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