NZ Workshop Hourly Rates 2026: What Mechanics Are Actually Charging

Every workshop owner has asked themselves the same question at 2am: "Am I charging enough?"

You look at your labour rate. Then you look at your bills. Then you look at the workshop down the road and wonder what they're charging. Then you check Trade Me for sold prices on similar businesses and try to reverse-engineer their numbers. Then you give up and go to bed, still not really knowing if your $95/hour is too high, too low, or just right.

The frustrating truth is that workshop labour rates in New Zealand have always been something of a mystery. Everyone guards their numbers. Industry associations publish vague "averages" that don't account for region, specialisation, or shop type. Your accountant tells you to charge more; your customers tell you you're already too expensive. The internet is full of advice from American shops charging in USD, which is about as useful as a chocolate spanner.

So we decided to actually figure this out.

We surveyed NZ workshop owners, analysed industry data, talked to accountants who specialise in automotive businesses, and crunched the numbers. This is what we found: the real rates NZ workshops are charging in 2026, broken down by region, shop type, and specialisation.

No fluff. No "it depends" without actual numbers. Just data.

National Average Labour Rates: The Big Picture

Let's start with the headline numbers. Based on our research across NZ workshops in early 2026:

The average labour rate for independent NZ workshops is now sitting around $110/hour including GST. That's up from around $95-100 just two years ago.

But "average" hides a lot of variation. The lowest rates we found were around $85/hour (typically smaller rural shops or those competing primarily on price). The highest independent workshop rates topped $150/hour (specialists, prestige marques, and Auckland CBD locations).

Dealerships are a different story entirely - we've seen rates from $140 to $200+ depending on the brand and location. But since most people reading this run independent workshops, we'll focus there.

How These Numbers Compare

For context, here's how NZ workshop rates compare to other trades and other countries:

NZ mechanics are roughly in line with other trades domestically, but often lower than international counterparts when you account for exchange rates and cost of living. This is one reason many experienced mechanics leave for Australia - the pay gap is real.

Labour Rates by Region

Where you are in New Zealand significantly impacts what you can (and should) charge.

Why the Regional Variation?

The obvious factor is cost: Auckland rents are brutal, and that cost has to go somewhere. But it's not just about covering your overheads.

Higher-income areas have customers who are less price-sensitive and more time-sensitive. A North Shore professional will happily pay $140/hour if it means their car is done right and done fast. A customer in a lower-income area might shop around more aggressively.

There's also competition density. In rural areas, you might be the only workshop for 50km - but there are also fewer cars. In Auckland, you're competing with dozens of shops but the customer base is massive.

Rates by Shop Type

Not all workshops are created equal, and rates reflect that.

The Dealership Premium

Dealership rates look eye-watering - often $160-200/hour. But they're not necessarily gouging. They're paying for showroom facilities, manufacturer requirements, ongoing training certifications, and diagnostic equipment that costs as much as a house deposit.

The opportunity for independent workshops is positioning yourself as the quality alternative at a fair price. "Dealership quality without dealership pricing" is a message that resonates.

Specialist vs Generalist

Specialists consistently charge more than generalists. A shop that only works on European vehicles can charge $140/hour because they've invested in specific tooling, training, and expertise. They're not trying to be everything to everyone.

If you're a generalist charging generalist rates, consider whether there's a niche you could own. The workshop that's "the Subaru guys" or "the diesel specialists" can justify higher rates because they offer something the general shop can't.

Rates by Work Type

Many workshops have different rates for different types of work. Here's what we're seeing:

Diagnostic work commands a premium for good reason. A skilled diagnostician with a $50,000 scan tool solving an intermittent fault is worth more per hour than routine servicing. If you're not charging more for diagnostic time, you're undervaluing your most valuable work.

How Rates Have Changed Over Time

Labour rates have increased significantly over the past few years - but not as much as many workshop costs.

That's roughly 30% increase over six years - about 5% per year on average. Sounds okay, right?

Now look at what else increased in that period:

• Commercial rent: Up 25-40% in most urban areas
• Mechanic wages: Up 20-30% (and still struggling to find staff)
• Parts costs: Up 15-25%
• Insurance: Up 30-50%
• Equipment/tools: Up 20-35%
• Electricity: Up 25-40%

For many workshops, labour rate increases haven't kept pace with cost increases. Margins have been quietly eroding.

How to Calculate What You Should Actually Charge

Forget what everyone else charges for a moment. What should YOUR rate be based on YOUR costs?

Here's a simple framework:

Step 1: Calculate Your True Hourly Cost

Add up your monthly expenses:

Step 2: Calculate Your Available Billable Hours

Not every hour you're open is billable. Be realistic:

• Hours open per week: Let's say 45 hours
• Minus non-billable time: Customer calls, quotes, parts runs, admin, cleaning, etc. - typically 20-30%
• Realistic billable hours: 32-36 hours per week per technician
• Monthly billable hours: ~140-155 per technician

Step 3: Calculate Your Break-Even Rate

Break-even rate = Total monthly costs ÷ Total billable hours

Example for a 2-person workshop:

• Monthly costs: $20,000
• Billable hours: 280 (2 techs × 140 hours)
• Break-even rate: $71/hour

That's just to break even. You need margin on top of that for profit, reinvestment, and buffer for slow months.

Step 4: Add Your Margin

A healthy workshop should target 25-40% gross margin on labour. That means:

• Break-even $71/hour + 30% margin = $92/hour minimum
• Break-even $71/hour + 40% margin = $100/hour minimum

If your calculated minimum is higher than what you're currently charging, you have your answer. You need to raise your rates.

Common Pricing Mistakes NZ Workshops Make

Mistake #1: Setting Rates Based on Competitors

"Bob down the road charges $90, so I'll charge $90."

Problem: Bob might be losing money. Bob might have lower rent. Bob might be subsidising his workshop with other income. Bob's business might be slowly dying.

Your rate should be based on YOUR costs, YOUR value, and YOUR target margin. Competitors are a reference point, not a ceiling.

Mistake #2: Not Raising Rates for Years

Many workshops haven't changed their labour rate in 3-5 years. They're afraid of losing customers.

Reality: Most customers expect rates to increase over time. They experience it everywhere else - groceries, petrol, tradies. A small, regular increase (5% annually) is easier for customers to absorb than a sudden 20% jump after five years of stagnation.

Mistake #3: Discounting Too Easily

"I'll do it for $80/hour for you, mate."

Every discount comes directly from your profit. If your margin is 30%, a 10% discount wipes out a third of your profit on that job. Discounts should be rare, strategic, and never just because someone asked.

Mistake #4: Not Charging for Diagnostic Time

You spend an hour diagnosing an issue, then quote the repair. Customer declines and goes elsewhere with your diagnosis.

You've just given away an hour of your most skilled work for free. Diagnostic time should be charged. If the customer proceeds with the repair, you can credit it toward the final bill. If they don't, you've been paid for your expertise.

Mistake #5: Undervaluing Your Expertise

That "quick look" that took you 10 minutes to diagnose? It's only quick because you have 20 years of experience. A less experienced tech might have spent 2 hours. You're not charging for the 10 minutes - you're charging for the decades of knowledge that made it 10 minutes.

How to Raise Your Rates (Without Losing Customers)

If you've made it this far and realised you're undercharging, here's how to fix it:

1. Give Notice

Don't surprise customers. Announce the increase 30-60 days in advance. A simple sign in the workshop and mention during service: "Just so you know, our rates are going up to $X from [date]."

2. Keep It Modest But Regular

A 5-7% annual increase is easier to accept than a sudden 20% jump. Customers are used to annual price increases. Make it routine.

3. Lead with Value

Don't apologise for the increase. Frame it around value: "We're investing in new diagnostic equipment / additional training / better facilities to serve you better."

4. Accept That Some Customers Will Leave

The customers who leave over a $10-15/hour increase were probably your least profitable anyway. Price-sensitive customers who shop around for the cheapest rate are rarely your best customers.

5. Do the Maths

If you raise your rate by 10% and lose 5% of your customers, you're still ahead. You're earning more while working less. That's a win.

The Bottom Line

Here's what we've learned:

• The average NZ workshop labour rate is around $110/hour in 2026
• Rates vary significantly by region ($85-150), shop type, and specialisation
• Many workshops haven't raised rates enough to keep pace with costs
• Your rate should be calculated from YOUR costs, not copied from competitors
• Regular, modest increases are easier than occasional large jumps

If there's one takeaway, it's this: know your numbers. Understand what it actually costs to keep your doors open, and price accordingly. The workshops that thrive aren't necessarily the cheapest - they're the ones that charge what they're worth and deliver value that justifies it.

You're running a skilled trade business. Price like it.