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How to Calculate Labor Gross Profit Percentage

Labor gross profit shows what is left from labor sales after paying for technician labor. What goes into labor cost (wages only, or wages plus taxes and benefits) varies, so pick one rule.

Formula

Labor Gross Profit = Labor Sales − Labor Cost
Labor GP % = Labor Gross Profit ÷ Labor Sales × 100

Worked example

EXAMPLE NUMBERS ONLY – not industry benchmarks.
Example numbers: $84,000 labor sales, $25,200 tech labor cost. Gross profit $58,800. GP % = 58,800 ÷ 84,000 = 70%.

FAQ

Is labor gross profit the same as margin?

Yes, labor gross margin percentage is another name for it.

Is it different from markup?

Yes. Markup divides profit by cost; GP % divides it by sales.

Should I include flat-rate pay?

Yes. Include all tech pay tied to the labor sold.

Get the spreadsheet

The Auto Service KPI Template Pack calculates this and other service KPIs. It comes as an Excel (.xlsx) workbook that also opens in Google Sheets (import steps included). The comeback log and per-tech scorecard are in the Pro version.

Standard – $39 (Payhip)Standard on EtsyPro – $129 (Payhip)Pro on Etsy

Educational only. KPI definitions vary by shop and DMS.