Job Profitability Calculator

A healthy profit margin for workshop jobs in New Zealand is typically 25-35% after all costs including labour, parts, and overheads. Some high-value services like diagnostics or specialist repairs may achieve 40%+ margins, while competitive services like WOFs and oil changes may run at 15-20%. The key is ensuring your average across all jobs maintains profitability.

True job profitability requires factoring in all costs: (1) Direct labour cost - technician wages plus employer costs like ACC and KiwiSaver (typically add 15-20%); (2) Parts cost at your wholesale price; (3) Overhead allocation - a percentage of fixed costs like rent, power, and insurance attributed to each job. Subtract these from your total revenue (labour charges plus parts with markup) to get actual profit.

Workshop overheads should include: rent or mortgage, power and utilities, insurance (business, public liability, equipment), tool and equipment depreciation, software subscriptions, phone and internet, consumables (rags, cleaners, small parts), admin wages, marketing costs, and professional fees (accountant, etc.). Most NZ workshops find their true overhead is 20-35% of labour revenue.

Parts typically contribute 30-40% of total workshop profit because they carry direct markup with minimal additional labour cost. With a 50% markup on parts, a $200 part generates $100 profit with no extra time required. Labour profit must cover technician wages and overheads, leaving a smaller margin. Smart workshops ensure adequate parts markup to maintain healthy overall profitability.

Review job profitability monthly at minimum, with weekly checks on individual jobs. Track metrics like average margin per job type, labour efficiency (quoted vs actual hours), and parts profit contribution. Quarterly, review your labour rate and overhead allocation to ensure they reflect current costs. Workshop management software can automate this tracking, giving you real-time visibility into every job.