{
  "slug": "flat-rate-pay-plan",
  "title": "Flat-Rate Technician Pay Plan Calculator",
  "heading": "Flat-Rate Pay Plan Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/flat-rate-pay-plan",
  "summary": "Model tech take-home and shop labor cost together before setting a flag rate.",
  "description": "Flat-rate pay plans set the flag-hour rate a technician earns per hour of book time produced, distinct from an hourly wage, and getting the rate wrong hurts either the shop (too rich, margin collapses) or the tech (too thin, they leave for a competitor). This calculator takes expected flag hours produced per week and a proposed flag rate to project weekly and annual tech pay, then compares that pay against the labor revenue it generates at your shop's ELR to show the resulting labor gross margin. Use it to negotiate a rate that keeps techs competitively paid — flat-rate techs should generally see their pay scale with efficiency — while keeping the shop's labor margin in a sustainable range, typically 60%+ after the tech's flag pay, payroll taxes, and benefits load.",
  "formula": "Weekly Pay = Flag Hours × Flag Rate. Labor Revenue = Flag Hours × ELR. Labor GP% = (Labor Revenue − Loaded Pay Cost) ÷ Labor Revenue.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=flat-rate-pay-plan",
  "inputs": [
    {
      "id": "flagHoursWeek",
      "label": "Flag hours produced per week",
      "kind": "number",
      "hint": null,
      "default": 45,
      "unit": "hrs",
      "min": 0,
      "max": null
    },
    {
      "id": "flagRate",
      "label": "Proposed flag rate",
      "kind": "number",
      "hint": null,
      "default": 32,
      "unit": "$/flag hr",
      "min": 0,
      "max": null
    },
    {
      "id": "elr",
      "label": "Shop effective labor rate",
      "kind": "number",
      "hint": null,
      "default": 130,
      "unit": "$/hr",
      "min": 0,
      "max": null
    },
    {
      "id": "burdenPct",
      "label": "Payroll tax + benefits load",
      "kind": "number",
      "hint": null,
      "default": 22,
      "unit": "%",
      "min": 0,
      "max": 100
    }
  ],
  "outputs": [
    {
      "id": "weeklyPay",
      "label": "Tech weekly gross pay",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "annualPay",
      "label": "Projected annual pay",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "loadedWeeklyPay",
      "label": "Loaded weekly cost to shop",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "laborGP",
      "label": "Resulting labor gross margin",
      "format": "percent",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Flag hours produced per week: 45 hrs",
      "Proposed flag rate: 32 $/flag hr",
      "Shop effective labor rate: 130 $/hr",
      "Payroll tax + benefits load: 22 %"
    ],
    "outputs": [
      "Tech weekly gross pay: $1,440.00",
      "Projected annual pay: $74,880",
      "Loaded weekly cost to shop: $1,756.80",
      "Resulting labor gross margin: 70.0%"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter flag hours produced per week (hrs).",
      "Enter proposed flag rate ($/flag hr).",
      "Enter shop effective labor rate ($/hr).",
      "Enter payroll tax + benefits load (%).",
      "Read your tech weekly gross pay on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "flagHoursWeek": 27,
        "flagRate": 19.2,
        "elr": 78,
        "burdenPct": 13
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "flagHoursWeek": 45,
        "flagRate": 32,
        "elr": 130,
        "burdenPct": 22
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "flagHoursWeek": 72,
        "flagRate": 51.2,
        "elr": 208,
        "burdenPct": 35
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What flag rate is competitive right now?",
      "a": "It varies heavily by market and specialty, but experienced diagnostic techs in most metro markets command $28-$40+ per flag hour, with master-certified or dealership-trained techs at the top end. Check local job postings for actual flag rates, not just hourly-equivalent averages, since the two aren't the same."
    },
    {
      "q": "What labor margin should I target after pay plan cost?",
      "a": "60-65%+ after the tech's loaded flag pay is a healthy target for an independent shop, leaving room to cover shop overhead, service advisor pay, and owner profit from the remaining labor gross profit."
    },
    {
      "q": "Should new techs get an hourly guarantee instead of pure flat rate?",
      "a": "Yes, especially in the first 6-12 months. A guaranteed hourly floor with flat-rate upside protects new techs while they build speed, and most states have minimum wage guarantee requirements for flat-rate pay plans regardless of preference."
    },
    {
      "q": "How does raising the flag rate affect retention versus margin?",
      "a": "A $2/hr flag rate increase on a 45-hour week is about $4,700/year more for the tech, often the difference in a competitive counteroffer, while only costing the shop a percentage point or two of labor margin — usually worth it to avoid the much higher cost of turnover and retraining."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/effective-labor-rate",
    "https://www.revenuelab.fyi/toolbox/technician-efficiency-proficiency"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Flat-Rate Technician Pay Plan Calculator (https://www.revenuelab.fyi/toolbox/flat-rate-pay-plan)"
}