what is effective labor rate
Effective Labor Rate Effective Labor Rate â This basically is your total labor sales, or individual techâs labor sales, divided by the billed hours by the team or individual tech. For example, your shop labor rate is $80, Technician A bills 36 hours and generates $2,380 in labor sales. Take the $2,380 in labor sales, then divide by the 36 hours and you get $66.11 as an effective labor rate. You col-lected 82 percent of your door rate. At 100 percent of your door rate, the total tech labor sales should have been $2,880. I know some of you are saying that you have heard a different definition for effec-tive labor rate. That might be true, but we