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Getting Paid as a Mechanic Pros and Cons of Flat Rate

Published on January 17, 2012 under Humble Mechanic

Like I said in yesterdays post, when I am out of the shop, cars are not at the front of my mind. I like talking about the industry, but not always the nuts and bolts of the job.(I feel like there is a joke in there somewhere) 🙂

When I talk to people about my job, one of the questions I get all the time is, “Has work been busy?”. That is a really interesting question, because it always leads to me explaining how most mechanics get paid. After I tell people, they usually say, “Wow, I never imagined that you got paid like that”. So I thought I would give you guys the low down on how I get paid, and how Flat Rate works.

Most dealership mechanics get paid on Flat Rate. The easiest way to understand Flat Rate is, I am paid based on productivity. The more work that I do the more I get paid. It is a pretty simple concept, but let me break it down a little more. I think if more people understood how mechanics get paid, they would appreciate what we do a little more.

Like I said, I am paid on productivity. Each job has an amount of time that it pays to complete. Lets take a job like replacing a headlight bulb. That job pays me .3 of 1 hour(that is 18 minutes). It does not matter how long it takes me to replace, I get paid .3 hours. If I can complete the job in less time, the extra is a bonus. If it takes me longer to complete, I come out losing. So if I made $10 per hour, I would get paid $3 to replace a light bulb.

What that also means if I am not working, actually doing work, I am not getting paid. I could go in to work for a 10 hour day and only get paid for 1hour. The flip side is, I can work a 10 hour day and get paid for 20 or more hours. It is a pretty interesting pay structure.

The times are based on several things. My dealer uses a calculation of warranty time. There are other labor guides that shop use like All-data, and Motors. They “say” the use the average time it takes a master mechanic to do the job. I think that sometimes they just make stuff up, because the times can be crazy!

I did a search to see what other say about how mechanics get paid. They are ALL written by professional writers that really do not understand the job. The system has pros and cons for mechanics and for customers.

Pros for the mechanic

This one is easy. The harder a mechanic works, the more they get paid. Simple! Working hard directly pays off. If its a job that does not pay well, you can hustle through it and move on to the next job that pays better.

Cons for the mechanic

There are some jobs that suck, plain and simple. They take longer than they pay. The other big con is, if there are no cars in the shop, mechanics get paid nothing! There is also the opportunity to take short cuts to do jobs faster. I can tell you, that almost always come back to bite a mechanic!

Pros for customers

The times are set. You will not have to pay more money because it takes longer to complete a job. This also makes mechanics work harder to get cars finished.

Cons for customers

Just like for the mechanic, it opens the opportunity to take short cuts that can result in the car not getting fixed. It also can let customers question how much they are paying. A job that takes 3 hours to complete, might cost a customer 6 hours worth of labor cost. ~this can be a post all on its own~. My reply to that is, “Would you want to pay more if it took longer?”. The answer is always no. 😉

That is pretty much the basics. Flat Rate is a love/hate relationship for me. Love the good days, HATE the bad ones. I think that I will dive deeper in this topic. Its one that is debated a lot in the shop.

What do you guys think? Good or bad for customers, mechanics?

 

 

 

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40 Comments

    1. Humble Mechanic

      I would guess something along those lines. I think the guide books used to calculate the times are very universal. I think it really depends on the volume of the shop. Slower shops might pay a base salary plus a commission. That will help off set slow times. My work does not do that. Some guys hate the fact that we have no base pay. I say, just work harder and it will not be an issue 95% of the time. Thanks for the reply Brett!

    1. Humble Mechanic

      Oh Kevin, you know that no one cares about the Service advisors!

      Ha, kidding, that is actually a great point. I just started writing a post about the service advisor/mechanic relationship.

      That is definitely a post to write on a day off, or a good day at work! 🙂

  1. Jeremy

    Sadly this post pay make me reconsider become a mechanic. I shouldn’t. I should want to do something because I want to do it not because of the pay. It has it’s pros and cons, as mentioned. Its really a weird/not the greatest pay system.

    1. Humble Mechanic

      Jeremy,
      Your right, its not the best system out there. There are techs that are really good at using the system and some that are not. I have become pretty good at using the system to my advantage.

      Basically, there are 2 types of work, Customer Pay, and Warranty. Customer pay work is generally where you gain time. You will learn how to do most jobs much faster. Warranty jobs, if you break even, you are doing good.

      You learn how to overlap certain things, like draining oil while balancing tires. Then there are jobs you can CRUSH the time on. I am talking getting paid 6 hours for 1 hour worth of work.

      My best week ever, I worked about 55 hours and got paid for 123 something hours. Nuts right! I would say one of my worst weeks I made about 35 hours. You can use the system to help off set some of the negative. It all comes down to how hard you want to work!
      Thanks so much for all the support on the blog btw!
      Charles

    2. David

      Jeremy; if your considering becoming a flat rate mechanic for the money, you outta consider a rewarding career as a janitor. The tool outlay (price of a fully furnished mechanics tool set, and box), could , and probably will run into the 10s of 1,000s of dollars, and in the end of the week, you are only guaranteed minimum wage for all hours worked, and yes, it does get that bad. A life time of hot dirty work, making a bunch of self centered scum bag ( the motor companies rich. The motor companies spent millions lobbying congress to have all (except minimum wage) of auto tech labor rights taken away. They even invented A.S.E. Certs to curtail licensing, and unionization. Even janitors have laws promising 10 minute paid breaks, and time, and a half for over time. Can you imagine how many scholarships could have been granted to the children of working class mechanics? Better spent screwing the people who endure grueling work, and training. They will have you working for free at least half the time your there, and forget about the 40 hour work week. No OT, mean 50-60hr guaranteed work, minimum wage guaranteed pay. Accepting a job at a dealership, or just about any flat rate shop, is signing a contract for endentured servitude ( does not apply to scum bag grifters with dirty fingernails. Do be another guy who’s gonna be a 40 year old freshman in college. Find a real career, and you will be much hapier

  2. Mustang

    Um, wow, where to start.
    First of all, Jeremy, EVERY technician is scared when they first go on flat rate after they complete their training. Its like anything else, you will learn to work it. You must control your temper, your attitude and follow your own process during difficult repairs. Listen to Charles, he has it figured out.

    Charles, you left out talent and attitude. You can teach someone to work on cars, you can train them. If they don’t have talent, or they spend their time whining and figuring out how to get out of a difficult job, they will not make the times they need to earn the kind of check they want. This is an art as much as it is a science.

    Service advisers…..I’ll leave that one alone for a while.

    There really is no better way to pay a tech or anyone for that matter. We are all motivated by something. All pay plans are designed, to some degree, for motivation. If designed properly, one is motivated to do the right thing. It takes some managing and some self control, as well as some character, but it works.

    1. Humble Mechanic

      Mustang,
      Good points as always! The phrase “This is an art as much as a science” is about as accurate as it gets. It takes practice, but once you get it, you got it!

      As far as attitude
      Attitude will make or break you in this industry. Your attitude will effect everything you do. Its up to you on which direction you want to take it. That goes for dealing with customers and co-workers.

      I think that we might disagree a bit on talent. Some people are naturally talented. I am not a naturally talented person when it comes to fixing cars. My talent is hard work! There are guys in the shop that I work at that have true talent, but do not want to put in the work. Anyone can overcome not being talented!

      Oh, good call on leaving out service advisors!

  3. What to do When You Have No Work | Mechanic Basics

    […] If you are just starting out as a technician, you need to know that sometimes the shop is SLOW! If you are a veteran tech, you KNOW it gets slow. this can be one of the most frustrating parts of the job. It becomes a “Hurry up and wait” game. Techs start to tweak out because they have been sitting around for hours, not doing work. And if your not doing work, your not getting paid, thank you Flat Rate. […]

  4. CURT

    I AM GOING TO SCHOOL FOR AUTO TECH WHY PPL DON’T WANNA WORK IN SHOPS NO MORE IS IT CAUSE IT AIN’T NO MONEY TO BE MADE OR THE PAY SYSTEM SCREWED PPL IS GETTING A AUTO JOB EASIER THAN GETTING A DIESEL ONE

    1. David

      Diesel is an hourly job for the most part, and for the most part, diesel techs have the same labor rights as the rest of the country. Flat rate is flat rape. Can you imagine if the world economy ran on the same principles as flat rate,? Example 30% for this, nothing for that, and oh yeah… If an average working person walks through the door, sell him, or her as much not needed shit as posible, but don’t worry about installing it. We have a back door sale every Friday. Get a real career, and live a normal, and stable life flat rape is nothing but a bunch of numbers in the air, and the ONLY way to actually make any real money on flat rate is to cross over to the dark side, and if you do, make sure your hair is combed, and your teeth are white always when at work. You just might wind up on 20/20 prime time.

  5. CURT

    IS THE PAY SYSTEM THE REASON PPL ARE GETTING OUT OF AUTO REPAIR I HEAR YOU CAN’T MAKE MONEY I AM IN SCHOOL NOW ARE THERE ANY HOURLY JOBS OR ARE DEALERSHIPS THE BEST ALSO DO DIESEL TECH USE THE SAME SYSTEM

    1. Charles

      Hi Curt,
      Most shops pay on a flat rate system. There are some that do not pay that way. It may be an hourly rate, it may be a % of sales, it really all depends on the shop.

      You can make money in the industry. Some mechanics are really good at it, and other are not. It is not always easy to make money, but there is money to be made.

  6. Ali Maire

    I’m looking into being a diesel tech and it’s a major life decision at this point in my life since I’m 16 and going back to school. If I spend my last two years studying at Gibson Tech and I don’t end up making it in the auto world, I’ve wasted 6 classes of other life skills I could’ve learned. My issue is: If the labor is hard for crap pay, is it really the profession for me? I’ve seen many pros and cons in researching this field which has fascinated me since my younger years of sitting on papa’s jack while he worked on Ole Blue, but the cons seem to outweigh the pros. I love the smell of the hot motor, I love the grease and the cling of the bolts. I always have, but it just doesn’t seem like the greatest career move for me if I’ll just quit because the demand for female mechanics is at its all-time low (like always). What I’m getting at is, I have the motivation, the skills, and the drive to make it, but will I be successful?? Just because I’m willing to try doesn’t mean all of the people I’ll have to go through are willing to give me a chance and make it possible.

    1. Charles

      @Ali,
      It is true, there are some negatives in this job. But, there are negatives in every job. If this is what you want, go get it.

      I feel like you will have to work harder being a female. Is that fair, NO! Is that the truth, probably.

  7. Ali Maire

    And it will always be good for the customers as long as they recieve what they pay for: a quality repaired vehicle. Depending upon the productivity and quality of the mechanic shop you work for (including its reputation), it will be good for the worker as well. Sadly, our success depends on MANY different unstable, unpredictable variables.

  8. Filly

    Excellent succinct explanation!! My husband is a mechanic and I’m going to bookmark this post to refer people to so they can better understand how unstable it *can* be depending on this system as a single income household. But in turn, it shows how responsible my husband is for his attitude and work ethic to make this system work for our family, enabling me to be a stay-at-home mom. It takes a great deal of effort on both our parts – on mine because I have to strictly budget and be able to cut back if it turns into a bad week (mostly based on weather) and on ours because we have to be good savers during the boon months to offset the slow months (typically Dec-Feb for us). I wonder if you’d be interested in illustrating a post about the complications that a “team-earning” system (vs individual earning) poses to the pay scenarios you’ve offered here? Have you ever worked at a dealership with that structure?

    1. Charles

      The ups and downs can be tough. Good budgeting is VITAL to surviving in the industry. I have not worked on a team that split hours. A few years ago, a group of guys did that at my shop. It worked out so so. I think doing a post about that is a great idea.

  9. Paul

    I have worked as a professional tech for the last 12 years, half flat rate and and half hourly. Let me just say that warranty flat rate in the rust belt, (I am from VT, we love road salt!) is bullshit! Period. I sometimes had 7 year old plow trucks that everything was a pile of rot, covered under warranty. Oil pans, electrical problems, 4wd problems, and every chassis and suspension problem. I won’t even mention how much fun it is to do a warranty engine or transmission job on a rotted truck. These vehicles are covered by the same book as the brand new ones. I am not good at typing so I am going to cut this short, or I’ll be here all day. Where I am from flat rate is a pure evil system that destroys techs morale and ruins their love for the trade they chose. You said you could bill 120 hrs in a week, then you must really have some really clean and not rusted vehicles. I was the top producer in the dealership for 12 straight months and could never bill more then 65-70 hrs, and I was beating the hell out of myself to do it. I worked there 5 years. NO MORE!!!!!!!!!!!! I went hourly for 4 and a half years after leaving the dealer and the problem there is that in my state, it is just plain hard for small business’s to survive due to all the government fees(taxes) and regulations you need to keep up with. Therefore it is hard to pay employees what they could be worth elsewhere, like a big corporate dealer where they can easily justify overcharging the uneducated customer for your time. The whole industry is quite screwed up as far as fairness to techs and fairness to customers. If anyone ever asked if I thought turning wrenches was a good career choice I would tell them it’s a great choice if you want to die sore, bitter and poor. In all reality it is the government who allows these systems to operate and keep truly small business and the working man poor. Big government, lots of insurance, rocket ship tech cars, 2 bean counters for every living and breathing tech. These are the real problems.

  10. Brian

    Think about this for sec…could you imagine if doctors got paid by how fast they performed surgeries or Police officers by how many tickets they wrote. Each time somebody gets their car worked on they put there lives in the hands of the mechanic…so why is it that Technicians are paid like fruit pickers. a penny a piece! Its absolutely insane to me. BUT!!!! if you are lucky enough to work for a shop that is extremely efficient with paper work with plenty of jobs then i agree with Paul…you can literally work yourself to the bone and be 100% percent underpaid while the shop racks in the benefits. Somebody needs to start a mechanics union and regulate all the unjust practices in this trade. I would NEVER tell a mechanic to just work harder!! I would say take your time and perform the best quality job you can perform without compromise.

  11. Frank

    Well after reading these blogs I have decided not to go to an interview with——————- In the morning why should my pay be cut because the shop does not have work for me or because I was the last one hired sounds like a union is what we need.

  12. mike

    This is a really interesting question. And there’s way too many variables for any one person to give an encompassing answer. I, however, am a dealership technician. One of the senior guys in a fairly demanding shop. And flat rate sucks. And i’m going to give you a couple of reasons why… 1.) shitty service advisors can mess your day up very bad. let’s say you do a job, you do it quickly. Under book time. And then said service advisor decides he/she will give the customer a break. And deduct the technician. So that job you just busted your ass on and made some money on just turned into a loss. 2.) It’s better to play dumb. I’ll give you an example. Ball joints on an f350 pay around 5 or six hours. Depending on options. And a motor on a focus pays 6 or seven… guess which one is significantly more work? This system does not benefit guys working on more difficult jobs. It benefits the idiots who can only manage to do brakes and suspension parts. 3.) warranty. Warranty sucks. And if you’re like myself, who does warranty work almost exclusively, there’s no chance to make back those lost hours. 4.) bookings and parts. So, let’s say you have a job booked for half of the day for you, and it’s only going to take you 2 hours. So, that kinda bungs your day up huh? Then, let’s say parts makes a mistake and forgets to order your parts… so that’s four hours you’re out… so who takes the hit for that. it’s not the idiot doing the booking, and it isn’t the guy in parts. It’s the technician. In what world is that fair?

    So I ask you, how is flat rate a fair system? I can see, in a perfectly oiled machine of a shop, it could be excellent. Where guys are booked properly, parts are always available, and an even spread of work is dolled out. But unfortunately the world is full of idiots, so it doesn’t work.

    1. Charles

      Mike,
      You have some VERY VERY VERY valid points. I 100% agree that a bad advisor can ruin a good tech. I have had 3, it was awful. Looking back I am not sure how I mad it past those times.

      You also have a good point about it being good to play dumb. The guy that plays dumb can get all the brake jobs, while the guy that busts butt, get the hard stuff. That is because the advisor “knows you will handle it”.

      Flat rate is NOT perfect. I did a video a few weeks ago about it. But what is the alternative?

      How would you feel if you got paid the same as the guy next to you, if you are a great tech, and he is a scrub? How do you motivate guys to work hard? I ask these questions because I don’t know the answer.

      I know 100% for sure that if my shop went to an hourly pay, productivity would plummet.

      1. mike

        You betcha, we have 2 less then competent service advisors. They make my job very frustrating.

        I myself just can’t stoop to that level. I’d rather be broke then bored. haha, I guess the trade is just a fickle bitch like that.

        I’ve been head hunted by a good friend of mine starting his own shop (Canadian chain fountain tire) and we’ve discussed this at length. He didn’t want to pay me flat rate, which I thought was great, because I didn’t want it either, so we came up with a little mixture of the two. But i’m thinking it’s never going to catch on, because it makes too much sense.
        Pay a guy a good hourly wage (28 an hour, in my area is a pretty standard wage) and then pay him a bonus, we figured a percentage of the gross labour (3-5%) keep the productivity up without having techs feeling like they’re getting f***ed. Pretty simple. Everyone is happy. Then i’ll be able to teach my apprentices better, and not have to worry about things. And one other word of caution for techs. Stay the hell away from Union shops. They’re terrible places to work.

      2. Marshal

        Little late to the party, but that’s easy. Offer both. Flat rate if your turn more hours than you work, but guarantee hourly pay at least. Then the tech that’s busting his ass gets paid more than the slacker beside him. Everyone still has the incentive to get work out efficiently. Who doesn’t want to get paid more time than they actually put in? And, you don’t get utterly screwed when you have to take on that tough diagnosis, or 6 hour engine job Mike mentioned.

        But I know all too well that no chain stores or dealers, and very few independent shops, would dare offer that. It would cost them far too much to pay good techs a fair wage.

  13. Brian

    Hi love the comments and wanted to post my two cents. I’ve been working as a mechanic for about 35 years mostly with fleets making an hourly wage. I just started my first flat rate job. I understand how well flat rate works when you are working on newer cars but my new job involves restoring antique and classic cars. No book in the world gives time for sandblasting and painting every nut and bolt before you re install it so I’m at the mercy of the person who gave the estimate. I’m lucky so far that the production manager will move hours around enough to compensate for the extra time some tasks take so I receive a full payday, but when it comes to the point when no extra time is left I will be the one who loses. The company won’t lose because they don’t have to pay me. The estimate writer won’t lose because I won’t get paid and they still get commission. Anyway just wanted to point out one way flat rate hurts the mechanic.

  14. Josh35

    I’ve been a diesel tech for about 9 years now.I have a great opportunity to leave a decent job that pays less than what it should, to go to work for a well known and we’ll oiled machine of a shop. It’s union, has great benefits and is flat rate. I’ll be going on as a Journeyman. This is my first flat rate job, and I just need some advise.
    Where I’m at now is hourly, and my production rate is through the roof. Others are allowed to be lazy, drag ass and play stupid, so their the first to be put on services and PMs. I do whatever is needed, never complain am extremely efficient and rarely have a screw up. I’m tired of working so much harder than an entire shop and getting paid less because they have been there longer, and not much longer. I put in my two weeks and 3 very one scrambled trying to figure out how to keep me there. What I’m getting at is, I work hard always and take a ton of pride in a job well done. I have no formal training, I have always been mechanically inclined on all types of engines and such……can I make a decent living doing what I love at this new job? It pays $28.26 an hour, flat rate with plenty of work. It’s a Mack, Volvo, Freightliner and GMC dealership. Any advise is greatly appreciated. Thanks

    1. Tami

      I hope your boss was paying you more than the “not so efficient” ones. Sounds like you should be a mechanic in supervisory role. I see this post is over a year old and am wondering how your new job turned out?

  15. Thai

    I worked at flat rate shop and it’s one of the most stressful environment ever. Mainly because it was difficult to keep track of my time spent on jobs and most of the time the service writers short sale you on a job. I was so frustrated that I decided to make an App for mechanic to keep track of times on jobs and work orders. Now the boss can’t cheat my time and I can calculate my pay by the end of the pay period.

  16. Abbigail

    What about a Team environment? All the mechanics hours are put into a bucket at the end of the day. Lube Techs (usually paid by the hour) can put their hours into the bucket as well but hold out 4 hours or so to pay for their wages. Everyone benefits

  17. Allen

    Hey guys my name is allen been workink on cars since akid 15 yrs dealerships last 24 working for family small shop. straight comm. no benefits but vac; Can i file taxes as a sub con. and file a 1099 k would it be worth it , thanx for reading, and responses. Just nuts and bolts.

  18. Nate

    This is an interesting old post that is more than 5 years old now. I’m going to comment to think out loud.

    I come from a related industry where we install accessories at the OEM’s factory in mass. I am the industrial engineer and quality supervisor. We pay employees hourly, but we are paid flat rate by the customer. I have been in this position for 6.5 years now.

    I do not have a solution to the flat vs. hourly, but maybe can add another perspective.

    There are two components to flat rate (in my experience.) There is the job rate (hr/job), which is multiplied by the billing rate ($/hr). This gives you $/job. Our overhead is covered by the billing rate.

    We pay techs hourly in part because WE own the process. The training is simple compared to fixing used cars and can be taught on the job relatively quickly to someone with a little bit of mechanical aptitude. We pay quality techs to check work. The installs are highly repetitive compared to fixing used cars, so efficient rates can be set and met and techs can build skill to a working level pretty quickly. It takes about 50 repetitions to get some skill at a task. How much time is invested in getting skill at changing a light bulb vs. rebuilding a major component? Side not: we have three skill levels, each with a pay differential.

    We send people home or transfer them to one of our other 3 departments (that are not related to installations) when we expect Lack of Work(LoW). They can only transfer to departments that they are certified trained in. This either keeps them busy earning hours, or they go home. Usually daily lay-off for LoW is voluntary. Our operation is ~80 hourly employees, so there is a population of people who want to go home and a population that wants to get every hour they can, and we cross train to optimize this.

    Our rates are specific to the work content in model, part, and layout of the facility. (This isn’t rocket science at all, but a little more than a post.) Our customer has several other service providers in different locations. In general, the rates are negotiated per provider. Also, we mostly handle new cars, so the rate is very consistent relative to used. No diagnostics in general. Just build or don’t build. Demand does fluctuate, but there is never waiting around. Either we have work that day or we don’t. Therefore, the idea of a book covering all dealer work everywhere is troubling to me. There is too much variability in used car repair AND variability in daily demand give the tech enough cushion that the dealer would be willing to pay for.

    I was about to go off on a theoretical answer, but let me comment on what exists. Hourly tech pay requires overhead in bean-counter types like myself to manage. This is not practical for small businesses. I’m guessing even corporate dealers don’t really go there if they are used to paying flat rate. I don’t see a better answer than the inaccurate book of rates for the small shop owner. Corporate dealers with multiple shops could possibly invest in bean-counters (industrial engineers or maybe operations focused accountant) to get more accurate numbers(?)

    Side note on unions. I’ve worked in automotive parts manufacturing in a union shop and finished automotive processing non-union, both as staff. Union dominated businesses are inherently less efficient than non-union, and therefore less competitive. When markets are rising, all boats float. When markets are down, the boat with the least draft (non-union) floats the longest. Both are boats, of various quality each group, but the lighter boat will generally float longer in bad times.

    Thanks for reading my rambling. Maybe I’ll sleep on this and come back with something useful.

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