What job costing is
Job costing compares what a repair order was billed with what it really cost. The direct costs are the technicians' time, the parts at what you paid for them, the paint and materials used and the sublet bills. What's left is the job's gross profit, and after the job's share of your overheads, its profit.
The estimate is a prediction made before the car is apart. Job costing is the check afterwards, and over a few weeks it shows which kinds of work, which insurers and which estimates make money. In FenderBender's 2026 survey, 91% of shops tracked performance measures, and nearly all of those tracked gross profit on parts, labor and materials separately.
A worked example
Take one repair at the example shop from our labor rate guide. Its labor rate is $94.60 an hour, an hour of a technician's time costs it $47.15, and its overheads come to $55.44 for every hour a technician spends on a job. The repair was estimated at 16 labor hours, 6 of them refinish:
- Labor: 16 hours at $94.60, one rate for body and refinish to keep it simple.
- Parts: billed at list, $1,500.00; the shop buys them 25% below list, for $1,125.00.
- Paint and materials: $42.00 for each of the 6 refinish hours.
- A camera calibration sublet to a specialist, and towing in, billed at cost.
The job took 21 hours: a seized bolt, a panel that needed more work than the estimate allowed and a second test fit. A bracket cost more than estimated, and clips weren't on the estimate, so parts cost $1,165.00. The bill didn't change.
| Billed | Cost as estimated | Cost as it went | |
|---|---|---|---|
| Labor | $1,513.60 | $754.40 | $990.15 |
| Parts | $1,500.00 | $1,125.00 | $1,165.00 |
| Paint and materials | $252.00 | $170.00 | $170.00 |
| Sublet: calibration | $360.00 | $300.00 | $300.00 |
| Towing | $150.00 | $150.00 | $150.00 |
| Total | $3,775.60 | $2,499.40 | $2,775.15 |
| Gross profit | — | $1,276.20 (33.8%) | $1,000.45 (26.5%) |
| Overheads at $55.44 an hour | — | $887.04 | $1,164.24 |
| Profit | — | $389.16 | -$163.79 |
Before sales tax. The repair, parts, materials and sublet are made up for the example.
What the example shows
The extra 5 hours and $40.00 of parts turned a $389.16 profit into a $163.79 loss. Those hours cost $235.75 in technician time and kept the car in a bay long enough to use $277.20 more of the shop's overheads.
Posted labor rate
$94.60
What every hour on the estimate was billed at.
Earned per hour worked
$72.08
The labor billed divided by the 21 hours it took.
Efficiency
76%
16 hours billed for 21 worked.
Some of the lost time could have been billed. Hidden damage and operations the estimating database doesn't include go on a supplement, and a judgment time that keeps running over is a sign to estimate that operation differently. Our supplements guide covers both.
The numbers to watch
The trade press defines some of these differently, so write down the formula you use and stick to it:
| Measure | How to work it out | What it tells you |
|---|---|---|
| Effective labor rate | Labor sales ÷ labor hours billed | The rate you really got across all your work, after insurers' rates and lower-rated hours |
| Earned per hour worked | Labor sales ÷ hours technicians actually spent on the jobs | What an hour of your technicians' time really brought in |
| Efficiency | Hours billed ÷ hours the work took | Whether jobs run over the estimate. Flat-rate coaches aim well above 100% |
| Productivity | Hours on repair orders ÷ hours paid | How much of the time you pay for you actually sell |
| Touch time | Hours billed ÷ days the car was in the shop | How much work a car gets each day it's with you. A common target is 4.5 hours a day |
| Cycle time | Days from keys in to keys out | How fast cars move, which insurers and customers both watch |
| Gross profit by category | Sales less direct costs, for labor, parts, paint and materials, and sublet separately | Which part of the business is earning, and which is slipping |
Some published reference points, none directly comparable with another:
- Touch time: 4 to 5 hours a day was the most common answer in FenderBender's 2026 survey.
- Cycle time: 5 to 7 days keys to keys was the most common self-reported answer in the same survey. In CCC's 2025 insurance data, repairs took about 13 days with no calibration and more than 17 with several.
- Rental length, which includes waiting before the repair: 15.1 days on average for collision rentals in the second quarter of 2026, from Enterprise.
How to cost every job
- 1
Clock technicians onto the job
Record when each technician starts and stops on a repair order, and on which part of the work. It's the only way to know the hours a job really took. - 2
Put every parts invoice on the repair order
Including returns, credits and the parts added after the estimate. One consultant found shops whose management system showed a 33% parts margin while their accounts showed 23 to 24%, because not every part was on a repair order. - 3
Record the paint and materials used
From the mixing scale's software where you have it, or at least check each month's paint bill against the refinish hours billed. - 4
Put sublet bills on the job
Calibrations, alignments, glass and towing, with what you paid and what you billed. - 5
Compare when the job is invoiced
Billed against cost for each category, and the hours estimated against the hours worked. - 6
Review the week
Look at the jobs that lost money together, and find the pattern: an operation, a vehicle type, an insurer or a technician.
Paint and materials
Paint and materials are usually billed in dollars per refinish hour, or by invoice, at rates from under $30 to more than $50 an hour depending on the market, according to one consultant's 2023 figures. A 2023 survey found about three in five shops invoice materials at least some of the time.
To cost them, keep paint and materials apart from shop supplies. Primers, sealers, color, clear, sandpaper, tape and masking belong in paint and materials. Seam sealer, cavity wax, clips, safety gear and tools don't: in one shop's monthly supplier bill of $16,379, about $5,000 wasn't paint. Our guide to pricing parts and paint and materials covers how to bill them.
Using what you find
- Estimate differently for operations that keep running over, and supplement what the database doesn't pay.
- Order parts complete and early, and chase returns and credits, so parts costs stay where you estimated them.
- Look at each insurer's and each kind of work's margins before you take on more of it.
- Use the hours you've measured, not hopes, when you work out your labor rate each year.
- Talk to technicians whose jobs often run over: it may be training, tools or the estimates they're given.
