Average Auto Repair Labor Rates by State (2026)

The article titled "Average Auto Repair Labor Rates by State (2026)" by Benjamin Johnson, published on June 30, 2026, provides an eight-minute read overview of the varying labor rates for auto repair across different U.S. states, accompanied by related industry insights and success stories from Tekmetric.

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Thought Leadership

Average Auto Repair Labor Rates by State

Benjamin Johnson

June 30, 2026

Read time: 8 min

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Find out what shops in your state are charging, and how to set a labor rate that keeps your shop profitable

In the automotive repair industry, your labor rate is more than just a number on an invoice — it is one of the key metrics that drives your business's profitability and overall growth. For shop owners, staying competitive while maintaining healthy margins requires a clear understanding of how labor costs fluctuate across the country. But knowing the national average is only half the picture. The more important question is: how does your shop compare?

Whether you are running a small independent shop or a high-volume operation, knowing where you stand relative to the average labor rate in your state — and against top-performing shops in your market — is essential.

This guide covers the current landscape of automotive repair labor rates across all 50 states, the factors that drive those numbers, and a step-by-step roadmap for setting a rate that supports your shop's long-term success.

Methodology and Key Terms

Tekmetric built this auto repair shop index as a community resource, backed by data from more than 10,000 shops across North America. Shops can use this tool to benchmark themselves and see how they compare state by state.

Key Terms to Know

Labor rate: The retail price per hour charged to the customer for repair services.

Flat-rate: A pricing model where a job is billed based on a predetermined number of hours from a labor guide, regardless of how long the actual repair takes.

Effective labor rate (ELR): The actual amount of labor revenue earned per billed hour after accounting for discounts, menu pricing, and unbilled time.

Understanding these terms will help you interpret the data below and apply it to your specific situation.

Mechanic Labor Rates by State

The average labor rate across the United States is $132 per hour, with the lowest state at $85 per hour and the highest at $197 per hour. Labor rates vary significantly by state, primarily driven by local cost of living and competition.

📊 See How Your Shop Compares — Free

The data below tells you what shops in your state are charging. But the labor rate is only one piece of the picture. The Tekmetric Shop Index lets you benchmark your shop across the four metrics that actually drive profitability — ARO, car count, parts margin, and effective labor rate — against thousands of real shops nationwide.

It's free, takes less than two minutes, and requires no Tekmetric account.

➡ Benchmark Your Shop Now →

Hourly Automotive Labor Rates by State

Alabama $124
Alaska $161
Arizona $145
Arkansas $116
California $156
Colorado $151
Connecticut $141
Delaware $141
Florida $138
Georgia $137
Hawaii $142
Idaho $136
Illinois $135
Indiana $123
Iowa $123
Kansas $120
Kentucky $126
Louisiana $132
Maine $110
Maryland $141
Massachusetts $133
Michigan $130
Minnesota $137
Mississippi $125
Missouri $120
Montana $135
Nebraska $127
Nevada $152
New Hampshire $128
New Jersey $140
New Mexico $141
New York $125
North Carolina $123
North Dakota $135
Ohio $125
Oklahoma $129
Oregon $150
Pennsylvania $115
Rhode Island $134
South Carolina $130
South Dakota $120
Tennessee $127
Texas $141
Utah $135
Vermont $110
Virginia $136
Washington $152
West Virginia $100
Wisconsin $125
Wyoming $134

Factors That Impact Automotive Labor Rates

Why do auto repair labor rates vary so widely from state to state? A few key factors drive the differences.

Cost of Living

In states with a higher cost of living, shop owners face higher wages to attract technicians, more expensive rent, and elevated utility and supply costs. Those overhead realities push labor rates up — not because shops are padding their margins, but because the math demands it.

Shop Type and Specialization

Dealerships typically carry the highest labor rates because of their overhead, factory-trained technicians, and reliance on OEM parts. Independent shops often have more pricing flexibility, particularly for routine services like oil changes. Specialty shops — focused on European vehicles, diesel, or performance — tend to command higher rates as well.

➡ Benchmark Your Shop Now →

Technician Expertise and Certifications

A diagnostic job requires a different skill set than a brake job. Shops that employ ASE-certified technicians or master technicians can and should charge accordingly. The rate reflects the expertise required to do the work correctly.

How to Set Your Labor Rate (Step by Step)

Setting your rate shouldn't be based on what the shop down the street is charging. It should be a data-driven decision grounded in your actual costs and performance targets.

Step 1: Calculate Your "Loaded" Labor Cost

Start with what it actually costs you to have a technician on the floor. This includes:

Wages and overtime
Payroll taxes
Benefits (health insurance, 401k)
Workers' comp and liability insurance
Training and certifications

Divide that total annual cost by the number of billable hours that technician produces in a year. That's your loaded cost — and it doesn't include any profit margin yet.

Step 2: Account for Overhead

Your labor revenue also needs to cover the cost of running the business:

Rent
Utilities and shop supplies
Marketing and software
Taxes

Step 3: Determine Your Target Profit Margin

Tekmetric shops average 65% labor profit margins. If your loaded cost for a technician is $45 per hour and you want a 65% margin, your base labor rate should be at least $128 per hour.

Step 4: Benchmark Against Your Market

Your internal numbers come first, but you can't ignore the local market. If your rate is $128 and every comparable independent in your area is at $100, you need to either clearly justify your value — through better inspections, faster turnaround, stronger communication — or find ways to reduce overhead. Benchmark against shops of similar size, service mix, and geography.

Step 5: Implement a Labor Matrix

Not every repair order is equal. Shops that implement a labor matrix can automatically adjust rates based on job complexity — billing more appropriately for diagnostic work or specialty repairs without manually recalculating every estimate.

➡ Benchmark Your Shop Now →

How Tekmetric Helps Your Shop Stay Profitable

Managing labor rates manually is a recipe for inconsistency and missed revenue. Here's how Tekmetric gives you the tools and data to stay ahead.

Know Where You Stand with the Tekmetric Shop Index

Before you can optimize your labor rate, you need to know how your performance compares to other shops. The Tekmetric Shop Index gives you free, instant benchmarking across four metrics: ARO, car count, parts margin, and effective labor rate. Enter your shop's numbers and see exactly where you rank against thousands of shops nationwide — no account required, no sales call, no commitment.

You can't improve what you don't measure. This is where that work starts.

➡ Benchmark Your Shop Now →

Real-Time Profitability Tracking

Tekmetric's reporting features give you live visibility into ARO, car count, revenue, and technician productivity — so you always know how your shop is performing, not just at the end of the month.

Custom Labor and Parts Matrices

Tekmetric lets you build a labor matrix that automatically adjusts rates by job type. A custom parts matrix works the same way on the parts side, protecting your margins consistently across every repair order.

Digital Inspections That Justify Your Rate

Tekmetric's digital vehicle inspections let your team send photos and videos of needed repairs directly to a customer's phone. When a customer can see the worn brake pad or the leaking gasket for themselves, they're far more likely to approve the work — and far more comfortable with the rate attached to it.

Accurate Labor Guide Integration

Tekmetric integrates with industry-standard labor guides so your estimates are based on real, accurate times — not guesswork or memory. That means technicians get credited fairly under a flat-rate system, and your service advisers spend less time on paperwork and more time with customers.

Benchmark Your Insights Now

Knowing the average labor rate in your state gives you a useful reference point. But the shops that stay profitable long-term don't stop at state averages — they benchmark continuously, track the right metrics, and make adjustments based on data instead of instinct.

Your labor rate should reflect your actual overhead, your team's capabilities, and the quality of service your customers experience. Use the state data above as a starting point, then go deeper with the Tekmetric Shop Index to see how your shop compares across every metric that drives profitability.

Ready to see where you stand? Benchmark your shop free with the Tekmetric Shop Index →

👉 Ready to grow your automotive business? [Book a personalized Tekmetric Demo Here]

FAQ

Scaling your auto repair business requires moving beyond simple spreadsheets and paper repair orders. You need a robust shop management software that has enterprise-level features, centralized real-time reporting, and helps you provide a consistent customer experience across locations.

This guide breaks down the top enterprise software solutions for auto repair shops with 2+ locations.

Which software features should I look for when I manage multiple shops?

If you are comparing software options for your chain operations, these are the modern features to look for:

Centralized real-time reporting: Tired of trying to guess how each shop location is performing? Pick a software that can pull the data you need from any location or aggregate it across shop locations within a user-friendly dashboard.

Inventory/parts management: Tracking parts can be difficult as you expand. Find a solution that can track inventory levels and transfer parts as needed across locations.

Standardized workflows: Having standard workflows streamlines your shop operations. Select a software that can standardize your operations, prices, and procedures.

Employee permissions: Managing employee permissions is critical to ensuring the safety of your company data and holding employees accountable. Pick a software that keeps your business secure.

Customer communication: Modern customers expect a higher level of communication than they did 10 years ago. Find a shop management solution that provides online scheduling, DVIs, two-way texting, and other modern customer experience tools.

Single vs. Multi-Location Management: What are the differences?

Why can’t you just use a single-shop system? The difference lies in automation and control.

Standardization: In a multi-location setup, you need to ensure that technicians at every shop are following the same workflow and procedures so your customer experience is consistent.
Visibility: Single shop software may have reporting, but you need to be able to compare metrics between shops to make informed business decisions.
Security: Multi-shop software provides employee permission settings and typically comes with advanced data protection.
Pricing: Most single-shop software options will charge you per user or limit repair orders. Enterprise software will grow with you and charge based on the number of locations.

Final Thoughts

Choosing an enterprise-level auto repair shop software isn't just about features; it's about finding a partner that helps you maintain a consistent customer experience as you grow. Whether you prioritize inventory management, deep metrics, or standard procedures, ensure you find a solution that can grow with you.

Thought Leadership

Shop Management

Best Auto Repair Software for Multiple Locations (Full Guide)

January 9, 2026

Read time: 4 min

We’re excited to announce that Tekmetric, the leading cloud-based shop management system for automotive repair shops, is joining forces with Shopgenie, the leading auto repair shop CRM, to provide a comprehensive all-in-one solution that optimizes operations and drives growth for auto repair shops. This combination is set to combine the best of both worlds, offering shop owners smarter tools, seamless integrations, and enhanced features to optimize operations and drive growth—all from a single, unified platform.

So, what does it mean for our partner shops? Here’s a few of the benefits you’ll see in the coming months:

Streamline your operations: Managing your shop requires balancing internal processes while delivering top-notch customer service. With the addition of Shopgenie, we’re not just expanding our platform—we’re creating a true all-in-one solution that addresses the real-world challenges you face every day. Soon, you’ll have one platform, one login, and one phone number for all customer communication, simplifying your workflow and reducing complexity.
Enhance Customer Engagement: Keep your customers informed and engaged with automated marketing tools, text reminders, and follow-ups. With integrated communication tools, you’ll deliver exceptional service that strengthens relationships and boosts customer loyalty.
Increase Efficiency & Profitability: Benefit from seamless integrations with CRM, booking, and marketing tools that reduce manual work, streamline operations, and ultimately increase profitability. Plus, you’ll continue to have the flexibility to use Tekmetric’s 70+ integrations in our robust ecosystem, with Shopgenie continuing to build and support integrations with other shop management systems.

Here’s what our leadership has to say:

“This combination sets a new standard for efficiency and customer experience in the industry. At Tekmetric, we are committed to providing shop owners with best-in-class tools to manage and grow their businesses. Similarly, Shopgenie’s ability to solve real-world challenges with intuitive technology has earned it the trust of shop owners nationwide,” said Sunil Patel, Founder and CEO of Tekmetric. “Together, we are building an all-in-one platform that empowers shop owners to attract, retain and serve customers more effectively, driving long-term growth.”

“Tekmetric’s relentless pursuit of innovation and passion for creating products that make shop owners’ lives easier could not be a more perfect fit for Shopgenie and our customers,” said Kieran O’Brien, CEO and Co-Founder of Shopgenie. “Our combined strengths will create a more complete, powerful platform that sets a new standard for auto repair software solutions.”

At Tekmetric, helping shops measure up is at the core of everything we do. With this combination, we’re building a seamless, all-in-one solution to manage every aspect of your shop more effectively. Together, we’re setting a new benchmark for the industry and aim to take your shop to the next level. Learn more at https://www.tekmetric.com/shopgenie.

Tekmetric Community

Product Updates

Tekmetric and Shopgenie Join Forces to Revolutionize Auto Repair Shop Management

October 16, 2024

Read time: 3 min

We're happy to announce that our commitment to innovation and customer satisfaction has been recognized! For Spring 2025, G2 has awarded Tekmetric with a range of badges, including Momentum Leader, Best Results, Best Usability, Most Implementable, and Grid Leader.

These awards reflect our customers' experiences and trust in Tekmetric, highlighting their role in our success.

What These Badges Mean

G2 award badges for Tekmetric.

Momentum Leader: We're leading the pack, constantly evolving to meet the ever-changing needs of the automotive industry.
Best Results & Best Usability: Tekmetric is designed to be intuitive and user-friendly, helping you achieve the results you want.
Most Implementable: Change can be scary – That's why we've made it easy to get started and integrate with Tekmetric so you can hit the ground running.
Grid Leader: This badge showcases how our customers describe Tekmetric as the go-to solution for auto shop management.

Thank You to Our Customers

We couldn't have done it without our customers! Your feedback and support drive us to continually improve and deliver the best possible shop management experience. We're excited to continue this journey with you and can't wait to see what we accomplish together in the future. We'll continue to innovate, listen to your feedback, and provide the tools you need to run your shop.