Flat Rate Pay Calculator
How to Calculate Flat Rate Pay
Flat rate pay is a compensation model widely used in the automotive repair and HVAC industries. Unlike a standard hourly wage where you are paid for the time you spend at the shop, flat rate pay rewards productivity. You are paid based on a pre-determined amount of time assigned to a specific task, regardless of how long it actually takes you to complete it.
To calculate your flat rate pay, you use the following primary formula:
Total Pay = Booked Hours × Flat Rate Hourly Wage
Understanding the Key Metrics
- Booked (Earned) Hours: This is the total number of hours assigned to the jobs you completed based on labor guides (like AllData or Mitchell1).
- Flat Rate Amount: This is your agreed-upon dollar amount per flagged hour.
- Actual Hours: The real time you spent at the shop (clock time).
Example Calculation
Imagine you are a technician with a flat rate of $30.00 per hour. During a one-week pay period:
| Metric | Value |
|---|---|
| Total Flat Rate Hours Completed | 50 Hours |
| Actual Hours Worked at Shop | 40 Hours |
| Gross Pay (50 x $30) | $1,500.00 |
| Efficiency (50 / 40) | 125% |
| Effective Wage ($1500 / 40) | $37.50/hr |
Why Efficiency Matters
In a flat rate system, your "efficiency" determines your actual earning power. If you are 100% efficient, you book exactly as many hours as you work. If you are highly skilled and complete a 4-hour brake job in 2 hours, you still get paid for 4 hours. This pushes your effective hourly rate higher than your base flat rate.
Conversely, if a technician is slow or faces rusted bolts and takes 6 hours to finish that same 4-hour job, they are only paid for 4 hours, lowering their effective hourly wage. Most successful technicians aim for an efficiency rating between 110% and 130%.