No French rule sets a garage's hourly labour rate: you calculate it, then you display it. Here is the method, the two mistakes that quietly cost money, and what the regulations require once the figure is settled.
An hourly labour rate comes from dividing the costs the workshop has to cover by the number of hours it can genuinely bill, then adding the margin you are aiming for. No regulation sets an amount or a ceiling, but displaying your hourly rates including VAT is mandatory in France, and it is one of the first things inspectors check in a garage.
An hourly labour rate is not a market price you copy from the garage down the road; it is the result of a division. On top, everything the workshop has to pay over a year apart from parts purchases. Underneath, the number of hours you will actually be able to sell.
Cost of one hour = annual costs to cover ÷ billable hours in the year. The displayed rate then adds the margin you want to earn on top of that cost, and finally VAT.
The two classic mistakes mirror each other. The first leaves costs out, especially the ones that do not leave the bank every month: depreciation on the lift, the alignment bench, specialist tooling, accountancy fees, training, technical subscriptions. The second divides by opening hours instead of billed hours — and that gap runs into tens of euros an hour.
Bpifrance Création defines cost price as the sum of the costs a business bears, separating direct costs (pay, subcontracting, depreciation on machines) from indirect costs (advertising, overheads, financial charges). For a workshop, the list fits into four blocks.
Parts, oil and consumables stay out of this calculation: they are re-invoiced on their own lines, at their own margin. Paint materials are the exception, and are dealt with further down.
This is where most labour rates go wrong. A bay open 35 hours a week does not produce 35 billed hours. Deduct, in order:
The ratio between the two is what workshops call efficiency. No sophisticated indicator is needed to start: take a full year of invoices, add up the labour hours actually billed, and compare them to the hours paid. The ratio you get is yours, not an industry average, and that is the one to use.
A word of caution: on a first calculation, take the lowest billable-hours figure you find credible. A slightly high rate can be negotiated; a rate set too low only shows up at year end.
Dividing costs by hours gives a cost price, the point at which you earn nothing. The margin is added next, and the way you express it changes the answer.
Once the rate is set, break-even is the check. Bpifrance Création defines it as fixed charges divided by the margin rate on variable costs, that is, the turnover that exactly covers every charge, with neither loss nor profit — and notes that it can be converted into hours or days to bill each month. That is the right form for a workshop: a number of hours to sell per month, which you compare to what the schedule can really produce. If break-even calls for more hours than the workshop holds, the problem is not the schedule, it is the rate.
The figures below are deliberately round and purely illustrative: they are neither an average nor a recommendation. Only your own records count.
| Step | Example | Where it comes from |
|---|---|---|
| Annual costs to cover, excluding parts purchases | €180,000 | loaded pay, rent, energy, insurance, depreciation, software, fees |
| Billable hours in the year (two bays) | 2,600 h | hours paid, less holiday, training and unsold tasks |
| Cost of one hour | €69.23 | 180,000 ÷ 2,600 |
| Rate excluding VAT, at 20% margin on the selling price | €86.54 | 69.23 ÷ (1 − 0.20) |
| Rate to display | €103.85 including VAT | × 1.20 at the standard VAT rate |
As an order of magnitude, the DGCCRF, the French consumer protection authority, cites Insee figures showing that the average cost of a mechanical labour hour rose from €84 in 2019 to €100 in 2023, a rise of more than 19%. A wide gap between your own calculation and that order of magnitude is not necessarily an error: location, specialisation and the shape of the workshop all explain it. It does deserve to be understood before it goes on the board.
Nothing obliges you to run a single rate, and no nomenclature is imposed. In practice, as soon as a workshop does more than mechanical work, several rates are fairer than one, because the bays do not cost the same to run.
In body repair, the grids exchanged with insurance assessors routinely work on several distinct rates, plus a paint materials item (ingrédients peinture) calculated per paint hour rather than sold as a supply. Two things to watch, whichever route you take: every rate you charge has to be displayed, and a fixed price is only sound if it too is displayed — otherwise the customer must be able to rebuild the amount from the time and the rate.
The calculation is free; the display is not. The order of 27 March 1987 (arrêté du 27 mars 1987) sets the price advertising rules for servicing, repair, roadworthiness testing, roadside assistance, towing and vehicle storage. The DGCCRF reads it as requiring hourly labour rates including VAT and fixed-price services including VAT to be brought to the customer's attention, outside the premises and in the customer reception area.
Three practical consequences:
Penalty for failing to display: the French Ministry of the Economy states an administrative fine of up to €3,000 for a sole trader and €15,000 for a company. And if you raise your rates, quotes already accepted remain due at the accepted price: see our guide to car repair quotes.
IZZI DEVIS is voice-driven workshop management software for mechanical, body repair and motorcycle professionals. On hourly rates, here is what it does, factually.
What it does not do: it will not calculate the rate on your behalf — that is a management decision — it does not replace the display in the reception area, and it takes no payment from private individuals. Details are on the garage quote software page.
No. Prices for vehicle servicing and repair are free: no rule sets an amount, a floor or a ceiling. What is regulated is customer information, so the display of your rates and the match between those rates and what you bill.
Inclusive of VAT. Prices aimed at consumers are displayed inclusive of all taxes, and the DGCCRF reads the order of 27 March 1987 as requiring hourly rates and fixed prices to appear inclusive of VAT, outside the premises and in the reception area. Nothing stops you showing the net amount as well.
There is no universal figure to borrow: it depends on holiday, absence and the share of time that is never sold. The sound method is to add up the labour hours actually billed over a full year and compare them to the hours paid.
Yes, and it is often fairer: mechanical, panel and paint work call on different equipment and different depreciation. The only constraint is that every rate charged must be displayed, so the customer can tie each invoice line to the right price.
No. An accepted quote binds you to the prices accepted, even if your rates have gone up since. For quotes still pending, issue a new dated version at the new prices, once the display has been updated.
This article is general information, up to date as of 19 October 2026. It does not replace advice from your accountant or legal adviser.
The IZZI DEVIS team
Designs and builds IZZI DEVIS, the voice-driven workshop management software for independent garages.
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