How to Calculate a Shop Hourly Rate
A useful hourly rate must recover annual shop costs across realistic productive hours, not simply divide costs by 2,000 calendar work hours.
Include annual costs
Consider wages, rent, utilities, maintenance, insurance, software, administration and equipment ownership.
Estimate productive hours
Remove holidays, leave, downtime, setup, quoting, maintenance and other non-billable periods.
Test the rate
Compare the resulting rate with the kinds of jobs your shop actually wins and the margin you need.