What is a labor rate?

The labor rate is a repair shop's charge per hour of work. It is also called the hourly rate or shop rate.

How the labor charge is calculated

Kosu (work hours)×Labor rate=Labor charge

Example:2.4 h × 30,000 yen/h = 72,000 yen

These figures are an example to explain the calculation only. Actual repair costs also include parts, paint materials and subcontracting.

ZENDAIKYO does not set or recommend any labor rate amount. Each business decides its own rate based on its own costs.

How much does it cost when the kosu changes?

Kosu (work hours) 2.4 h×30,000 yen/h(Example)=

72,000 yen

Labor charge = Kosu (work hours) × Labor rate

How a shop works out its labor rate

The basic approach is to take the cost of running the shop for one year (staff, equipment, buildings, overheads and so on) plus a reasonable profit, and divide it by the number of hours of work in a year that turn into sales.

Labor rate = (annual operating cost + reasonable profit) ÷ annual billable work hours

Why heavy vehicle shops are different

Repairing heavy vehicles requires frame straightening machines, large paint booths, cranes, large workshops and highly skilled technicians. These investments lie behind the rate.

The link with efficiency

With the same costs, fewer billable hours mean a higher labor rate. Process management and efficiency are the foundation of a fair rate.