How much should a tech repair shop charge for labor? Your tech repair shop labor rate is a math problem, not a market guess. Add monthly fixed costs to your technician's loaded cost, divide by the hours that actually land on tickets, then add the margin the shop needs. That is your floor, and the shop down the street does not know it. Part 3 of the nine-part Fix the Shop First series, with a free calculator.
Fix the Shop First · Part 3 of 9
By Rob Link, Founder & CEO, Tech Care Association · September 23, 2026 · 20 min read
What's in this post
- Key takeaways
- The short answer: how to calculate a tech repair shop labor rate
- What shops are saying
- Why the shop down the street is the wrong input for your labor rate
- Input 1: What does the shop cost to open every month?
- Input 2: What does an hour of technician actually cost?
- Input 3: How many hours actually land on a ticket?
- Input 4: What margin does the shop need?
- The floor rate, worked: a repair shop hourly rate from four inputs
- The Repair Labor Rate Calculator
- When the ceiling is below the floor
- From rate to price: how to price repair labor
- The TCA's Take
- What to do Monday morning
- The floor is yours. The presentation is where you compete.
- Quick summary
- Common questions about repair labor rates
Key takeaways
- The floor rate comes from four inputs the shop already has after Part 2: fixed costs, loaded technician cost, paid hours, and utilization.
- Billable hours, not paid hours, are the denominator. This is where most rates go wrong.
- Margin is added on top of the floor, not hoped for underneath it.
- When a competitor caps your price below your floor, the options are overhead, utilization, service mix, or exit, and the calculator shows which.
- The rate is one number. How it is presented (flat, per repair, tiered, minimum) is a separate decision, covered briefly here and in Part 4 next week.
The short answer: how to calculate a tech repair shop labor rate
Direct answer
Your labor rate is a math problem, not a market guess. Add your monthly fixed costs to your technician's loaded cost, divide by the hours that actually land on tickets, then add the margin the shop needs. That is your floor. The shop down the street does not know your overhead. If their price is below your floor, you have a cost problem or a mix problem, not a pricing problem.
The TCA Labor Rate Formula
Floor rate = (monthly fixed costs + loaded technician cost) / billable hours / (1 - target margin)
What shops are saying
Observational evidence from TCA Repair Community Listening. Method and limits are in the footer.
In the online discussions the TCA reviewed over two weeks, repair professionals stated their labor prices freely and argued about them constantly. Not one described how the number was built. Shops know their price. Almost none described knowing their rate.
In one discussion of flat screen labor, stated floors clustered between $85 and $100, with a low of $40 from the only shop in a small town and a high of $150 or more. The structures varied: a $100 minimum that drops to $60 when the job turns out quick, a flat amount plus a multiple of the part cost, a list price with a capped coupon. Two participants said the chain store in the next town caps what they can charge; one said he cannot go above $85. Another has held the same price for two years.
The sharpest split came over a liquid-damaged console. Several participants priced from the device's replacement value, on the reasoning that customers will pay a certain amount to fix anything that costs $600 to replace. One argued the device's value is irrelevant and that hours times rate, plus parts, is the only honest method. Stated prices for that one job ran from $50 to $299.
The community is arguing value against cost without a shared vocabulary for either. This chapter supplies the cost half.
Why the shop down the street is the wrong input for your labor rate
When you copy a competitor's price, you copy one number and none of the things that produced it. You do not get their rent. You do not get their payroll, their loan balance, or whether the owner takes a paycheck. You do not get their utilization, which Part 2 defined as the share of paid bench time that lands on a ticket. You do not get their mix, and a shop living on short, repeatable jobs has different economics from a shop doing board work.
You also do not know if their price works. Why Tech Repair Shops Fail laid out the closure record. Some of the prices you are matching belong to shops that will not be open next year. In the discussions the TCA reviewed, undercutting stories were common: a competitor at $75 for a current flagship screen, another at $19.99. No participant described actually losing a customer to one.
The TCA has to own a piece of this. In 2025 the TCA published Simplifying Your Tech Repair Shop Pricing, which set the minimum hourly rate as monthly expenses divided by available work hours, and described $60 to $100 an hour as an industry standard. This chapter supersedes both points. Available hours is the wrong divisor, for reasons input 3 makes plain. And the TCA has no source for that range that meets its current evidence standard, so it is withdrawn. It takes four inputs to find the rate that is right for your shop.
There is no correct national labor rate. There is a correct labor rate for your shop.
Input 1: What does the shop cost to open every month?
Monthly fixed costs, excluding bench technician pay.
This is the denominator of Part 2's number five, months of cash reserve, used again. Pull the last three months of bank statements and average them: rent, utilities, software and POS, insurance, phones and internet, loan payments, marketing you are committed to, counter or admin payroll.
One adjustment from Part 2. Part 2's fixed cost list included base payroll. For this formula, take bench technician pay out of the fixed cost number, because it goes in as its own input next. Count it once.
What shops are saying. One participant put combined housing and shop lease costs above $6,000 a month beside an $80 labor charge and observed that it only works at one repair every ten minutes. That is input 1 meeting the price with nothing in between. The rest of this chapter is the in between.
Input 2: What does an hour of technician actually cost?
Loaded technician cost = wages x (1 + employer taxes and benefits percentage).
A technician paid $20 an hour does not cost the shop $20 an hour. The employer's share of Social Security and Medicare is 7.65 percent of wages by federal statute. State and federal unemployment insurance and workers' compensation come on top and vary by state and by your claims history. Paid time off, if you offer it, is a wage you pay for an hour nobody works. Your payroll provider can give you the real percentage in one phone call.
What the federal data says. There is no federal wage category for an independent phone, tablet, and computer repair technician. The closest occupation in the Bureau of Labor Statistics Occupational Employment and Wage Statistics program is Computer, Automated Teller, and Office Machine Repairers (SOC 49-2011). According to the Bureau of Labor Statistics May 2025 estimates, released May 15, 2026, the national median wage for Computer, Automated Teller, and Office Machine Repairers (SOC 49-2011) was $22.99 an hour, or $47,810 a year. Read it for what it is: the closest federal occupation, not a repair-industry wage survey. It includes ATM and copier field technicians, and it excludes the self-employed, which leaves out a large share of this industry.
On the gap between wage and cost, the BLS Employer Costs for Employee Compensation release for June 2026, published September 9, 2026, put average private industry compensation at $46.89 per hour worked, with wages at 70.0 percent and benefits at 30.0 percent. That is all private industry, not repair, and a small shop with no health plan or retirement match will run well under 30. The part that does not go away is the legally required piece. For full-time private industry workers it averaged $3.76 an hour against $36.97 in wages, or about 10 cents on every wage dollar. At the $22.99 median, that alone puts the loaded hour above $25 before a single paid day off.
What shops are saying. In a discussion of roughly 40 comments about technician pay, stated hourly pay clustered at $15 to $20 for entry technicians and $20 to $25 for experienced ones, with commission or tips commonly added. One skill-tiered scale ran $15 for screens and modular work, $20 for soldering and refurbishing, and $25 for technicians who also handle unlocks. These are figures participants stated, not a wage benchmark. They sit close to the federal median, and they are wages, not costs.
If you are the only technician. Several participants across the discussions said they do not pay themselves or have no employees. No participant described putting a value on the owner's own bench hour. Use the on-paper rate from Part 2: what you would have to pay someone else to do your bench work. Enter zero and the formula hands you a rate that only works as long as you work for free.
Input 3: How many hours actually land on a ticket?
Billable hours = paid technician hours x labor utilization.
You pay for every hour a technician is in the building. You only get paid for the hours that land on a ticket.
This is Part 2's number three, and it is the input everyone skips. A full-time technician is paid for roughly 2,080 hours a year. The shop cannot sell 2,080 hours. Technicians answer the phone, check customers in, look up parts, wait on deliveries, clean the bench, redo the occasional job, handle warranty returns, and talk to the customer who wanted twenty minutes. All of it is paid. None of it lands on a ticket.
Look at what utilization does to the cost of labor alone, before a dollar of rent. Take the worked example's loaded technician cost of $22.50 an hour (illustrative):
| Utilization | Technician cost per billable hour |
|---|---|
| 100 percent | $22.50 |
| 75 percent | $30.00 |
| 55 percent | $40.91 |
| 50 percent | $45.00 |
Illustrative arithmetic, not a benchmark. The TCA has no sourced industry range for repair shop utilization. Measure yours.
Same technician, same paycheck. The cost of a sold hour doubles between a full bench and a half-full one. Now do the same thing with the rent.
Why dividing by paid hours produces a rate that loses money. Divide the month's costs by paid hours and you get a rate that assumes every paid minute is sold. It never is. Charge that rate for the hours you actually sell and the unsold hours come straight out of the owner's pocket. The worked example below shows the size of it.
What shops are saying. Shops already hold the data for this input without using it. One participant described screens on four recent phone generations at $120 to $170 in labor and about 20 minutes of bench time. Arithmetic on that one participant's stated numbers implies $360 to $510 per bench hour on that job. It is not a benchmark, and most participants had never framed it that way. Short, repeatable jobs were described as easy money, not as a rate. A separate discussion of technician metrics showed the target state already exists in the community: owners there named rework rate, net hourly productivity, and a direct labor efficiency ratio. One added a fair caution, that the best technicians spend unbillable time cleaning up other people's failures, which no ratio captures.
Input 4: What margin does the shop need?
Rate with margin = break-even rate / (1 - target margin).
Break-even is not a business plan. A shop that exactly covers its costs has nothing for the cash reserve from Part 2, nothing for the tool that breaks, nothing for the slow month, and nothing for growth. Margin goes on top of the floor, not hoped for underneath it.
The arithmetic trips people up. To keep 20 percent of every dollar, you do not add 20 percent to your cost. You divide by 0.80. A $100 cost with 20 percent added is $120, and $20 of $120 is 16.7 percent, not 20. Divide $100 by 0.80 and you get $125, and $25 of $125 is 20 percent.
Setting a target: the TCA set targets in Part 2 the same way it sets this one. It is your own. There is no sourced operating margin benchmark for independent tech repair, and the TCA will not invent one. Start from what the shop has to fund in the next twelve months: the reserve target you named in Part 2, equipment, debt paydown, a raise for your lead technician. Turn that into a percentage of labor revenue. The 20 percent used below is illustrative.
The floor rate, worked: a repair shop hourly rate from four inputs
Floor rate = (monthly fixed costs + loaded technician cost) / billable hours / (1 - target margin).
A worked example (illustrative numbers carried over from Part 2, not a benchmark). One technician, paid for 160 hours in the month. Direct technician labor of $3,600, which was $30 a ticket across Part 2's 120 tickets and is $22.50 per paid hour here: a $20.00 wage plus 12.5 percent in employer taxes. Utilization of 55 percent, so 88 billable hours. Fixed costs of $9,000 a month, which in this example covers rent, utilities, software, insurance, a loan payment, and counter payroll, but not the technician. Target margin of 20 percent.
- Monthly cost to cover: $9,000 + $3,600 = $12,600
- Billable hours: 160 x 55 percent = 88
- Break-even rate: $12,600 / 88 = $143.18 per billable hour
- Floor rate with margin: $143.18 / 0.80 = $178.98 per billable hour
Now the mistake. Divide the same $12,600 by 160 paid hours and you get $78.75. Add the same margin and you get $98.44. That looks like a sensible labor rate. Charged across the 88 hours the shop actually sells, it brings in $8,662 against $12,600 in costs, and the shop loses about $3,940 a month while the bench looks busy. In the TCA's illustrative example, the floor rate built on 88 billable hours ($178.98) is 82 percent higher than the rate built on 160 paid hours ($98.44), and the entire difference is labor utilization.
What the floor is, and is not. The floor is what every billable hour has to bring in after the part is paid for, however the shop collects it: a labor line, a parts markup, a flat price, or some of each. It is not a command to print $178.98 on a rate sheet. To see where you stand, take last month's repair revenue, subtract parts cost, and divide by billable hours. That is what you collect per billable hour today.
Run that on Part 2's example shop. Revenue of $14,400 minus $5,200 in parts leaves $9,200. Across 88 billable hours that is $104.55. Break-even is $143.18. The gap, $38.63 an hour across 88 hours, is $3,400 a month, which is exactly what that shop is losing. Part 2 showed a gross margin of $46.67 per ticket and said it had to cover everything else. This is what "did not cover it" looks like as a rate.
If you post an hourly labor rate and earn parts margin separately, the calculator has an optional line to credit a conservative monthly parts gross profit. Run it without the credit first. Parts margin is real, and it is the subject of the October 7 chapter. It is a cushion, not a plan.
The Repair Labor Rate Calculator
Free, no signup, and nothing you type leaves the page. Enter last month's numbers. The math is shown line by line so you can check it.
The Repair Labor Rate Calculator
Enter last month's numbers. The math is shown line by line so you can check it. Nothing you type leaves this page.
The floor is what last month's numbers say you need per billed hour before your target margin means anything. If your market ceiling sits below this floor, the math has not failed. It has told you something nobody else will.
Open the calculator in its own tab
When the ceiling is below the floor
This is the objection from Part 2, and it is a fair one. Two participants said a chain store in the next town caps what they can charge. One cannot go above $85. If the math says your floor is above what your market will pay, the math has not failed. It has told you something nobody else will.
A ceiling below the floor leaves four levers. Each one points to a chapter in this Guide.
- Fixed costs. Renegotiate the lease, downsize the footprint, cancel software nobody opens, refinance the loan. In the worked example, taking fixed costs from $9,000 to $7,500 moves the floor from $178.98 to $157.67.
- Utilization. Part 2, number three. In the worked example, moving from 55 to 75 percent moves the floor to $131.25. Twenty points of utilization did more than $1,500 a month of rent. Both together bring it to $115.63.
- Service mix. The October 14 chapter covers what earns bench space. The highest implied hourly figures in the discussions the TCA reviewed came from short, repeatable jobs: charge port cleaning, which four participants named as the pure-labor ticket, a console port repair named most often as the ideal repeat job. If the capped repair cannot clear your floor, the question is how much of your bench it should occupy.
- Exit the category. If a repair cannot clear the floor after the first three levers, stop offering it, or offer it only as a way to fill hours that would otherwise sell for nothing, knowing that is what you are doing. Part 2 said the same of program work: a filler, not a foundation.
"Match the chain" is the one option that is never on the list. The chain has a different rent, a different parts contract, a different payroll, and a parent company. You are not matching their price.
Matching the chain means adopting their price with your costs.
From rate to price: how to price repair labor
The customer never sees your hourly floor. They see a price. Getting from one to the other is a presentation choice, and every structure described in the discussions the TCA reviewed can sit on top of the same floor.
Per-repair pricing. Estimate ticket time by repair type, multiply by the floor, add the part. Ticket time is not bench time. A 20-minute screen still has intake, inspection, a ticket to write, testing, reassembly checks, a call to the customer, and checkout. If that adds 15 minutes, it is a 35-minute ticket. At the illustrative floor, that is about $104 after the part. One shop in the discussions quotes a 45-minute turnaround on screens; at the illustrative floor a 45-minute ticket is about $134. Time ten of your own before you trust either number.
A minimum charge. Every ticket carries the same intake and checkout no matter how short the repair. A minimum protects the floor on small jobs. The participant with a $100 minimum that drops to $60 on quick jobs is running this logic already. What the floor adds is a way to check whether $60 still clears it.
Tiers. Part 2's listening found one shop with three tiers on a single model, roughly $65, $95, and $145, separated by warranty and turnaround. Tiers are presentation. The test is whether the bottom tier clears the floor after the part. If it does not, it is not a budget option. It is a subsidy.
Difficulty surcharges. Shops that do board work described base-plus pricing: a base plus an amount per torn pad after a failed DIY attempt, or a regular price plus an amount per ripped trace. The reasoning participants gave is exactly right: extra time costs money because it displaces other billable work. That is the floor rate, stated in an owner's words.
Effective labor rate, the monthly check. The posted rate is a promise. The effective rate is what happened: repair revenue minus parts cost, divided by billable hours. Discounts, bundles, warranty redos, and underbilled jobs all leak out between the two. Put the effective rate beside the floor every month. It is the sixth number, and it belongs on the same sheet as Part 2's five.
Two things are deliberately short here. Whether to charge for diagnosis, and how much, is next week's chapter. Parts markup is October 7.
The TCA's Take
This section is the TCA's position, not a finding from the community evidence above.
A shop that prices below its floor is paying customers to come in. The TCA's position is that the floor is non-negotiable and the presentation is where the creativity goes. Flat, tiered, hourly, minimum, surcharge: all fine, on top of the floor. None of them fine underneath it.
Every objection the TCA heard this week has the same answer.
"The chain in the next town caps my price." Then you know your ceiling, and the only open question is your floor. If the floor is under the ceiling, you have room and did not know it. If it is over, you have four levers, and matching is not one of them.
"Customers will pay $175 to $200 to fix anything on a $600 console." Maybe so. Value-based pricing is a fine way to decide how far above the floor to go. Without a cost-based floor underneath, it is a guess with a rationale attached. Know the floor first, then charge what the repair is worth.
"The device's value is irrelevant. Hours times rate plus parts." Half right, and the better half. But only if the rate was built and not borrowed. An hourly method running on someone else's number is still a guess.
"There's a guy doing it for $19.99." There always is. You do not know his costs, whether he pays himself, or whether he will be open in a year. His price is information about him.
"I've held my price for two years." Your landlord, your parts supplier, and your payroll provider did not hold theirs. A price held against rising costs is a pay cut you gave yourself quietly.
"I'm solo. I don't pay myself." Then your rate is subsidized by the most skilled technician in the building working for free. Put a number on your hour and run the formula again.
"Those quick jobs are easy money." They are your best rate, and you should know it as a rate. That is the first fact you need for the service mix chapter.
The discussions showed that some owners already run labor as a ratio. The target state is not theoretical. It is in the community today, and it is four inputs away for everyone else.
What to do Monday morning
- Run the calculator with last month's numbers. Fixed costs without technician pay, technician wages, your employer tax percentage, paid hours, utilization, and a target margin. If you did not measure utilization after Part 2, use the 55 percent placeholder, then go measure it. Do not chase precision on the first pass. Chase completion.
- Find what you collect per billable hour today. Last month's repair revenue, minus parts cost, divided by billable hours. Put it beside the floor. Write the gap down, in dollars per hour and dollars per month.
- Time your next ten tickets of your most common repair, door to door. Intake to checkout, not just bench time. Divide what you collected after the part by the minutes. Compare it to the floor. That one number tells you whether your most common job is carrying the shop or being carried by it.
The floor is yours. The presentation is where you compete.
Every owner in the discussions the TCA reviewed could state a price. Not one described how it was built. The build is four inputs you already have, one division most shops get wrong, and one more for margin. After that, the number is yours. It does not move because someone across town ran a coupon. It moves when your rent, your payroll, or your utilization moves, and you will be the first to know.
Next Wednesday, September 30, the series turns to the diagnostic fee: whether to charge one, how much, and when to credit it. A technician is not worth zero dollars an hour because they are finding the fault instead of installing the part. Bring your floor rate. You will need it.
Start here. Free, no signup.
Run the Repair Labor Rate Calculator
How healthy is your shop, really?
TCA ShopCheck is a free two-minute health check built for independent repair shops. Your Run It Well score is the fast read on how the operational side is functioning. This chapter and the calculator are the detail behind the pricing part of it.
Quick summary
- A tech repair shop labor rate is calculated, not copied. Floor rate = (monthly fixed costs + loaded technician cost) / billable hours / (1 - target margin).
- Loaded technician cost is wages plus employer taxes and benefits. The employer share of Social Security and Medicare alone is 7.65 percent of wages.
- Billable hours are paid hours multiplied by labor utilization. Dividing costs by paid hours produces a rate that loses money on every unsold hour.
- Margin is added by dividing by (1 minus the target), not by adding a percentage on top.
- Federal wage anchor: $22.99 an hour median for SOC 49-2011, the closest federal occupation to a repair technician (BLS OEWS, May 2025, released May 15, 2026). It is a wage, not a cost and not a rate.
- If a competitor caps your price below your floor, the four levers are fixed costs, utilization, service mix, and exiting the category. Matching is not one of them.
- The TCA has published no labor-rate benchmark and withdraws the $60 to $100 range from its 2025 pricing article.
Common questions about repair labor rates
How do I calculate a labor rate for a tech repair shop?
Add monthly fixed costs to your loaded technician cost (wages plus employer taxes and benefits). Divide by billable hours, which is paid technician hours multiplied by utilization. That is your break-even rate. Divide it by one minus your target margin to get the floor rate. The TCA's free Repair Labor Rate Calculator does the arithmetic and shows each step.
What is a good hourly labor rate for a phone or computer repair shop?
The TCA has not published a labor-rate benchmark and does not recommend using one from an unsourced list, including the $60 to $100 range the TCA itself cited in 2025, which is withdrawn. Two shops with different rent, payroll, and utilization need different rates. Calculate your own floor. It is the only rate that is right for your shop.
Why use billable hours instead of paid hours?
Because you only get paid for the hours that land on a ticket. Dividing costs by paid hours assumes every paid minute is sold, which never happens. In the TCA's illustrative example, 88 billable hours out of 160 paid produces a floor rate 82 percent higher than the paid-hours rate, and charging the lower number loses about $3,940 a month.
Should I match a competitor's or a chain store's repair price?
No. A competitor's price tells you nothing about their rent, payroll, utilization, or whether the price even works for them. If a competitor caps your price below your floor, the options are lower fixed costs, higher utilization, a different service mix, or leaving that repair category. Matching is not on the list.
I am a solo owner with no payroll. What do I enter for technician cost?
Enter what you would have to pay someone else to do your bench work, plus employer taxes. If you enter zero, the formula produces a rate that only works while you work for free, and it will break the day you hire.
Should a repair shop charge hourly or flat rate?
Either works. The floor is an hourly figure, but customers can see it as a flat price per repair, a minimum charge, or tiers by warranty and turnaround. Multiply the floor by realistic ticket time, including intake, testing, and checkout, then add the part. Check monthly that your effective rate, repair revenue minus parts cost divided by billable hours, stays above the floor.
More from the TCA Blog
- Busy or Profitable? 5 Numbers Every Tech Repair Shop Must Track (Part 2)
- Fix the Shop First: Stop Chasing the Next Thing (Part 1)
- The full Fix the Shop First series
- Why Tech Repair Shops Fail
- The Data Gap Costing Tech Repair Shops $50,000+ Per Year
- How Healthy Is Your Repair Shop? Take the Free 2-Minute Health Check
Rob Link is the founder of the TCA. He built and ran a multi-location repair chain in an earlier era of this industry, and he'd tell you today's operators have it harder. The TCA is independent of carriers, manufacturers, and insurance companies, which is exactly why it can tell shop owners the truth about growth.
Sources and methodology
- Technician wage: U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2025 estimates, released May 15, 2026 (USDL-26-0725). Occupation: Computer, Automated Teller, and Office Machine Repairers, SOC 49-2011. National median $22.99 hourly, $47,810 annual. This is the closest federal occupation to an independent repair technician, not a repair-industry wage survey. OEWS estimates exclude the self-employed. Confirmed September 19, 2026.
- Employer compensation costs: U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026, released September 9, 2026. Private industry: $46.89 total compensation per hour worked; wages and salaries 70.0 percent, benefits 30.0 percent. Full-time private industry workers: wages $36.97, legally required benefits $3.76. The "about 10 cents on every wage dollar" figure is the TCA's arithmetic on those two numbers. All private industry, not repair specific.
- Employer share of Social Security and Medicare (7.65 percent): federal statutory rate under the Federal Insurance Contributions Act.
- Earlier pricing guidance from the TCA: Simplifying Your Tech Repair Shop Pricing, April 2, 2025. This chapter supersedes its hourly rate formula and withdraws its $60 to $100 range.
- Worked examples in this chapter use illustrative numbers carried over from Part 2 to show the formula. They are not industry benchmarks, and the TCA has not published a benchmark for labor rate, utilization, or operating margin.
- Stated prices, times, and pay figures from Community Listening are reported as participants stated them. Arithmetic on stated figures is labeled where it appears.
About this data: The TCA reviewed approximately 230 comments from repair professionals across 12 online industry discussions about repair pricing between September 9 and 19, 2026. These discussions were voluntary and were not collected through a representative survey. Findings describe the comments reviewed and should not be interpreted as estimates for the entire repair industry. Comments from parts vendors and service resellers were excluded. Individual participants are not identified without permission.
Published September 23, 2026. Last updated September 23, 2026.
