Guides · Labor

Is my repair shop's payroll too high for my sales?

Payday comes and the bank account feels thin, even on good weeks. Here's how it played out at our sample shop, the way a mechanic works a car: concern, cause, correction, verification.

1

The concern

Nate's payroll ran 30.9% of sales, over his 30% goal, for 6 weeks straight.

Nolavi alert that auto repair shop payroll is 30.9 percent of sales, over the 30 percent goal
Over goal, with a reason ready.
2

The cause

Nolavi compared paid hours to flag hours. Techs were paid for 236 hours a week but only billed 188. Most of the gap was waiting on parts and comebacks on two jobs.

Bar chart of auto repair technician paid hours versus billed hours showing time lost waiting on parts and comebacks
The gap had two causes.
3

The correction

Parts are now ordered when the estimate is approved, not when the car is on the lift, and Nolavi flags any job that comes back.

4

The verification

Billed hours rose to 214 a week and payroll fell to 28.4% of sales, with no one losing hours.

Auto repair payroll results: lower payroll percentage and more billed hours without cutting staff
Better, without cutting anyone.

Example shop. Nate's Auto Repair is Nolavi's sample shop with made up numbers. The steps are exactly how Nolavi works on a real shop's data.

Questions

Quick answers.

What percent of sales should payroll be at a repair shop?

Many shops aim for about 30% or less, including all staff. Your goal depends on your mix of work.

Why is my payroll high when we're busy?

Often techs are paid for hours they can't bill: waiting on parts, approvals or comebacks.

Keep reading

See it on a sample shop.

Open the demo and find this kind of problem yourself in a minute. Or book your 14 day free trial: it starts with a quick call, and we set it all up and fit it to your shop.

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