How Much Should You Charge for Garage Labour? The Definitive UK Guide

Running a garage in the UK isn't just about fixing cars. It's about making sure the numbers work so you can keep the lights on, pay your team, and still take home a proper living.

One of the biggest questions UK garage owners wrestle with is:

Maybe you’ve typed ‘car mechanic labour rates UK’ or ‘garage labour rates 2025’ into Google. But the truth is, no average figure will give you the right answer for your garage.

Quick Answer (for busy garage owners)

Most UK garages should calculate their labour rate using this formula:

That's the only way to know the right number for your business. Labour rates in the UK can vary from £45/hour in rural areas to over £130/hour in London, but your costs and goals matter more than averages. You can work out your exact number in just 10 minutes with our free Gross Target Profit Calculator.

Why There's No Single "Right" Garage Labour Rate

Garage A is a sole trader working out of a small rented unit. Their monthly costs are about £700.

Garage B is a busy three-bay workshop with a receptionist, diagnostics equipment on lease, and high street rent. Their monthly costs are closer to £10,000.

If both charge the same garage hourly rate of £45/hour, only one of them is going to survive.

That's why copying the garage down the road is a dangerous game. You don't know their overheads, their goals, or how much they actually pay themselves.

The Real Risk of Undercharging

Many independent garages fall into the trap of charging "what everyone else charges" — often £45–£70/hour.

Here's the problem:

• If your costs are higher than theirs, you'll lose money every month.
• If your costs are lower but you undercharge anyway, you'll be working harder for less.

Either way, you're building a business that doesn't serve you.

And here's the painful truth: most garage owners pay themselves last.

UK Regional Labour Rate Context

Across the UK, car mechanic labour rates vary widely:

• Rural areas: often £45–£65/hour.
• Mid-sized towns: usually £65–£90/hour.
• London & major cities: £90–£130+/hour.

But here's the key: these averages don't matter as much as your actual costs and profit goals. Setting your labour rate based purely on geography means you could be undercutting yourself — or pricing yourself out of business.

Profit First: A Better Way to Think About Pricing

Instead of taking whatever is left at the end of the month, the Profit First approach flips the script:

1. Decide how much you want to pay yourself.

   But think carefully here: is your “happy number” before tax, or after? Are you factoring in a pension? A reasonable pension contribution for a garage owner could be £30k a year — if you don’t build that into your labour rate, you’re short-changing your future self.

2. Add in your overheads and a target profit.

   Profit isn’t greedy — it’s what gives you breathing space, covers emergencies, and funds growth.

3. Work backwards to set your hourly garage labour rate.

This way, you're building a business that funds your life — not the other way around.

Worked Examples

Let's run the numbers for two garages, but first, a quick note on billable hours:

When we talk about “billable hours,” we don’t mean every hour you’re in the garage. A typical month might be 160 working hours, but once you factor in admin, ordering parts, quoting, and phone calls, you’ll only bill around 70–80% of that. For a sole trader, that usually works out to about 120 billable hours/month. For a larger garage with multiple bays and staff, the number is higher (e.g. 300 billable hours/month).

But What About Customers?

If you’re thinking about raising your labour rate, you’ve probably had these worries cross your mind:

What If I'm Already Undercharging?

If your current garage labour rate is below your calculated number:

1. Acknowledge it now — better late than never.
2. Raise your rate gradually (e.g. £10/hour at a time) instead of all at once.
3. Communicate with customers — when asked, explain that higher rates mean you can keep offering quality service and stand behind your work.

When and How to Increase Your Rates

Raising your rates isn't a one-time event — it's part of running a healthy garage.

• When to review: At least once a year, or whenever your costs jump significantly (rent, energy, insurance, staff).
• Best timing: Announce changes at the start of a new tax year (April) or after investing in new equipment/training.
• How to tell customers:
  • Be honest: "Our costs have gone up, and we want to keep providing reliable service."
  • Show value: "We've invested in new diagnostic tools to fix your car faster."
  • Keep it positive: customers respect transparency more than silence.

The Simple Formula

Here's the formula you can use for your own numbers:

This works whether you're on your own or running a multi-bay operation.

FAQ: Garage Labour Rates UK

Ready to Work Out Your Number?

Don't guess. Don't copy. Calculate.

👉 Use our free tool here: Gross Target Profit Calculator

It walks you step by step through your overheads, pay, and profit goals — and gives you the exact mechanic hourly rate your garage needs to thrive.

Final Word

There is no magic number that every garage should charge.

But there is a right number for your garage. It's the number that pays you properly, covers your costs, and leaves profit for growth.

Stop working for scraps. Start charging what your time is truly worth.

📌 This is a question every garage owner faces at some point. Come back to this guide whenever you need to check your numbers — it’ll still apply years from now.