How to Set RV Repair Labor Rates From Your Own Costs

Most RV shops set their labor rate by looking at what the shop across town charges and landing somewhere close. That number tells you what one competitor thinks the market will bear. It tells you nothing about whether your rate covers your technicians, your building and your own paycheck. A rate built from your own costs does.

This guide walks through the calculation the way an owner can actually do it at the desk: what a technician hour really costs, how many hours you can bill, what the building costs per billed hour, and how to add margin without fooling yourself. We don’t publish a recommended rate, and neither should anyone else: there is no number that fits every shop.

Why copying another shop’s rate doesn’t work#Link to the section “Why copying another shop’s rate doesn’t work”

Two shops charging the same posted rate can have very different results. One pays its techs more, one owns its building, one loses a fifth of its paid hours to moving rigs and waiting on parts. A copied rate inherits none of your costs and all of your risk.

Your mix of work matters too. If you do manufacturer warranty work, the labor rate and the hours allowed on those claims come from your agreement with each manufacturer, not from this calculation. That makes it even more important that the rate on your customer-pay work is built on solid ground.

Step 1: Work out what a technician hour costs you#Link to the section “Step 1: Work out what a technician hour costs you”

Start with the wage you actually pay each technician, not a market figure. For context, the U.S. Bureau of Labor Statistics (BLS) estimated that recreational vehicle service technicians earned a median of $25.00 an hour and a mean of $27.14 an hour in May 2025, with the 10th to 90th percentile running from $17.37 to $37.48. BLS counted about 17,430 people in the occupation, most of them employed by RV and other motor vehicle dealers. Those are national figures across every kind of employer. Treat them as a sanity check on your own pay plan, not as a number to plug in.

The wage is only part of the cost. Every paid hour also carries payroll taxes and benefits, usually called the burden. The federal pieces are set by the IRS:

For a sense of scale, the BLS Employer Costs for Employee Compensation survey put private-industry costs for installation, maintenance and repair occupations at $49.01 per hour worked in June 2026: $33.61 in wages and $15.41 in benefits, with $3.81 of that in legally required benefits. Benefits were 31.4% of total compensation, which works out to roughly 46 cents of benefits for every dollar of wages. That national average includes paid leave, insurance and retirement plans, so your number depends on what you actually provide. Add up your own costs for a year and divide by wages paid to get your burden percentage.

Step 2: Measure how many hours you can actually bill#Link to the section “Step 2: Measure how many hours you can actually bill”

A technician paid for 40 hours does not produce 40 billable hours. Some of that time goes to moving rigs, cleaning up, waiting on parts, chasing a comeback, training or diagnosis you chose not to charge. The ratio of hours billed to hours paid is your billable efficiency, and it changes the required rate more than almost any other input.

Don’t guess it. Track it for four to eight weeks: the hours each technician was on the clock and the labor hours you invoiced for their work. If your technicians clock in and out of jobs, you already have both numbers. In RVDesk, the time clock records time against each work order as well as the day, and reporting shows hours logged against hours sold for each technician.

The cost of a billable hour is then:

Labor cost per billed hour = (hourly wage × (1 + burden %)) ÷ billable efficiency

Step 3: Spread your overhead across billed hours#Link to the section “Step 3: Spread your overhead across billed hours”

Overhead is everything the shop spends that isn’t a technician’s wage or a part you resell. For most RV shops the list includes:

• Rent or mortgage, property tax and building maintenance
• Utilities, including the power and compressed air the bays run on
• Insurance: general liability, garagekeepers, property and vehicles
• Service advisor, parts and office wages, with their burden
• The owner’s salary, if the owner isn’t billing as a technician
• Shop equipment, lifts, scaffolding and their maintenance or loan payments
• Shop supplies you don’t charge back, software, phones and internet
• Accounting, legal, licensing, marketing and card processing

Total it for a year, then divide by the billable hours from Step 2 across all technicians. That gives you overhead per billed hour. Use the hours you can realistically bill, not the hours you wish you could.

Step 4: Add margin the right way#Link to the section “Step 4: Add margin the right way”

Labor cost per billed hour plus overhead per billed hour is your break-even rate. Below it, every hour of labor loses money. Profit has to come on top, and how you add it matters.

Margin is profit as a share of the price. Markup is profit as a share of the cost. If you want 20% of each labor dollar to be profit, divide your break-even rate by 0.80. Multiplying by 1.20 adds a 20% markup, which is only about a 16.7% margin.

Labor rate = (labor cost per billed hour + overhead per billed hour) ÷ (1 − target margin)

What margin to target is a business decision, not a formula. It has to fund slow months, equipment you will need to replace, comebacks you fix for free and the growth you want.

A worked example (hypothetical numbers)#Link to the section “A worked example (hypothetical numbers)”

This example uses round numbers we made up to show the arithmetic. They are not an industry benchmark and they are not a recommendation. Replace every input with your own.

Now change one input. If the same shop bills only 70% of paid hours, the labor cost per billed hour rises to $52.00, overhead is spread over 4,368 hours instead of 4,992 and rises to $57.14, and the break-even rate climbs to $109.14. Holding the same 20% margin would take a rate of about $136.43. Ten points of efficiency moved the required rate by roughly $17 an hour.

It works the other way too. At 90% efficiency the same shop breaks even at $84.89 and reaches its 20% margin at about $106.11. Before you raise your posted rate, look at where the paid hours are going. Fixing parts delays and unbilled diagnosis can do as much for the bottom line as a rate increase, and customers never see it.

Flat-rate pay plans and the rate you charge#Link to the section “Flat-rate pay plans and the rate you charge”

Many shops pay technicians by flagged hours instead of clock hours, which moves some of the efficiency risk from the shop to the tech. It doesn’t remove your obligations. The U.S. Department of Labor says most employees must be paid at least the federal minimum wage for all hours worked and overtime for hours over 40 in a workweek, and that when pay is figured on a piece-rate, commission or other basis, overtime is computed from the average hourly rate those earnings work out to. Some dealership mechanics fall under specific overtime exemptions, and state law can be stricter, so check with the Department of Labor or an employment attorney before you design a pay plan around them.

For the rate calculation, use what you actually expect to pay per billed hour under your plan, including any guaranteed minimum, and keep measuring clocked time even if you pay by the flag.

Check your rate against what you actually collect#Link to the section “Check your rate against what you actually collect”

Your posted rate and the rate you collect are different numbers. Discounts, goodwill, hours you wrote off and comebacks all pull the collected rate down. Once a month, divide the labor dollars you invoiced by the labor hours you billed. If that effective rate sits well below your posted rate, the leak is in how jobs are quoted and billed, not in the rate itself.

A few habits keep the two close:

• Quote diagnosis as its own line so it isn’t given away inside the repair.
• Use saved, priced jobs for the work you quote every week, so the hours don’t drift down advisor by advisor.
• Record declined work and the reason. A pattern of declines on one kind of job is a pricing signal.
• Recalculate every year, and whenever you add a technician, change pay plans or sign a new lease.

When the rate changes, put it where customers will see it before they say yes: on the estimate. Our guide on writing RV repair estimates customers approve covers how to show labor, diagnosis and fees so the number holds up.

Want to see hours logged against hours sold on your own work? Book a demo and we’ll walk through RVDesk’s time clock and reports with your shop in mind.