Shop rate calculator
58% of the rate is direct labour · 42% is overhead
Currency-agnostic — enter CAD or USD and the result is in the same currency. Estimates only; your real rate should come from tracked labour hours and department spend.
What a shop rate actually covers
Shop rate is the fully loaded cost of one hour of maintenance labour — not the technician's wage, but everything it takes to deliver that hour: wages with benefits and payroll burden, supervision, the building, utilities, tooling, consumables, training, and compliance. When a shop bills its work orders at an under-calculated rate, the difference doesn't disappear. It piles up in an unallocated overhead bucket that no machine owns — so equipment cost per hour reads low everywhere, in-house work looks artificially cheap next to dealer invoices, and the department looks like a cost centre that can't account for its own spending.
Loaded Shop Rate = (Direct Labour + Department Overhead) ÷ Billable Wrench Hours
The denominator matters as much as the top line. Technicians are paid for roughly 2,080 hours a year but typically log only 1,400 to 1,700 of them against work orders — the rest is vacation, training, meetings, and non-productive time. Dividing by paid hours instead of billable hours is the single most common way shops understate their rate.
A worked example: four-tech shop
Take a maintenance department with four technicians logging 1,250 billable hours each — 5,000 wrench hours a year. The same defaults are loaded in the calculator above.
| Cost line | Annual | Per billable hour |
|---|---|---|
| Direct labour (wages plus burden) | $520,000 | $104.00 |
| Supervision & admin salaries | $140,000 | $28.00 |
| Utilities & facility | $84,000 | $16.80 |
| Tools & equipment | $60,000 | $12.00 |
| Shop supplies | $48,000 | $9.60 |
| Training, safety & other overhead | $48,000 | $9.60 |
| Loaded shop rate | $900,000 | $180.00 |
$180 for every billable hour — $104 of it direct labour, $76 of it overhead. Now suppose this shop had been charging work orders an estimated $50 "wage rate" instead. Every wrench hour would under-allocate $130, and across 5,000 hours a year that's $650,000 of real department spend landing in an overhead bucket instead of on the machines that consumed it. The spend didn't change — only where it hides.
We wrote a full piece on why this number decides how your department is judged — shop rate: the number that decides whether your maintenance department is a cost centre or a business — covering burden, billable hours, and the overhead black hole in detail.
A rate only works if it's applied
The calculator gives you the number; the discipline is charging it on every work order. Tenmil applies your shop rate to every labour hour technicians log, adds parts and outside invoices, and lands the full cost on the asset — so the department's spend is allocated as the work happens, not reconciled at year end. That's how equipment cost per hour stays honest, and how the overhead bucket stays empty.
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Frequently Asked Questions
Common questions about calculating and applying a loaded shop rate.
Add up everything it costs to run the maintenance department for a year — direct labour with burden, supervision and admin salaries, shop supplies, tools and equipment, training, utilities and facility, safety and compliance, and any other overhead — and divide by the billable wrench hours the shop actually logs to work orders in that year. The formula is: loaded shop rate = total annual department cost ÷ billable wrench hours.
Everything the department spends, not just wages. Direct labour with benefits and payroll burden is the starting point; on top of it come supervision and admin, the building and utilities, shop tooling and service trucks, consumable supplies, training, safety and compliance costs, and software. A cost you leave out of the rate does not disappear — it just sits in an unallocated overhead bucket instead of on the equipment that consumed it.
Two compounding reasons. First, a wage is not the cost of labour: benefits and payroll burden typically add 25–40% on top. Second, technicians do not bill every paid hour — after vacation, training, meetings, and non-productive time, a full-time tech logs roughly 1,400 to 1,700 wrench hours a year, so the department’s whole overhead spreads across fewer hours than you pay for. A $38-per-hour wage routinely becomes a loaded rate north of $150 once the full department is counted.
The hours technicians actually log against work orders — the denominator of the shop rate. Paid hours include vacation, sick time, training, meetings, and shop cleanup; none of those can be charged to a machine. If your technicians are not logging time to work orders consistently, that is the first thing to fix, because without a real denominator the rate is a guess.
Put your real shop rate on every work order
See labour, parts, and outside costs land on the asset automatically — in a one-hour walkthrough on your own fleet scenario.