Why cost every job
Once the car is out, add up what the job really took (the hours, the parts, the paint and materials, the outwork) and set it against what you charged. Do it on every job, or a good sample, and you'll see which work pays, which doesn't, and why.
Nobody publishes South African figures for panel shop margins, so your own numbers are the only benchmark you have. What the industry has said points one way: in 2019 SAMBRA said members were being asked to discount their invoices by 2.5% to 10%, which it put at 20% to 30% of a repair's gross profit, and in 2026 it described downward pressure on repair margins and longer payment cycles.
What to record on every job
You can only cost a job you've recorded. For each one, keep:
- The hours each artisan spends on it: a start and stop on the job card, or a daily sheet of hours per job.
- Every parts invoice, booked to the job, with the part numbers.
- The paint and materials it used, from the mixing scale if you have one.
- Outwork invoices: alignment, glass, trim, calibration.
- Towing and storage, and who pays them.
- The final invoice, split between insurer and customer on an insurance job.
- Whether the car came back, and what fixing it took.
The law requires a record of each employee's time worked, but not the time spent on each job: recording hours per job is for you. It's the record most shops don't keep, and the one that shows where the profit goes. How long to keep the rest:
| Records | Keep them | Law |
|---|---|---|
| The records behind your tax and VAT returns: invoices, tax invoices, credit notes and your books | 5 years from the return | Tax Administration Act s29; VAT Act s55 |
| Each employee's time worked and pay | 3 years from the last entry | Basic Conditions of Employment Act s31 |
| A company's records under the Companies Act | 7 years | Companies Act s24 |
Records that matter to a SARS audit, objection or appeal must be kept until it's finalised, even after five years (Tax Administration Act s32).
Costing a finished job
- 1
Add up what you charged
By category and before VAT: labour, parts, paint and materials, outwork, towing and storage. On an insurance job, use what the insurer actually paid, after any discount. - 2
Cost the labour
Multiply the hours the job really took by what an hour of your artisans' time on jobs costs you: their pay and on-costs, spread over the hours they spend on jobs. - 3
Add the other costs
Parts, paint and materials, outwork and towing at what they cost you, before VAT and after any trade discount. - 4
Work out the gross profit
What you charged less what it cost, for each category and in total. Gross profit as a share of what you charged is the margin. - 5
Take off overheads
Multiply the hours the job took by your overheads per hour: rent, office staff, power and the rest. What's left is the job's real profit.
A worked example
Here's a made-up private job in the example shop from our labour rate guide, which charges R471.05 an hour before VAT. An hour of its artisans' time on a job costs it R166.47, and its overheads come to R233.92 an hour, so it breaks even at R400.39. The quote was for 16 hours of labour, parts costing R12 000.00 with a 25% markup, paint for 3 panels at R1 400.00 each, a wheel alignment and the tow in.
The job took 21 hours: a seized bolt, and a run in the clear coat that had to be redone. A bracket went up after the quote and the clips weren't on it, so the parts cost R12 400.00. The customer paid the quoted price.
| Category | Charged | Cost | Gross profit | Margin |
|---|---|---|---|---|
| Labour | R7 536.80 | R3 495.87 | R4 040.93 | 53.6% |
| Parts | R15 000.00 | R12 400.00 | R2 600.00 | 17.3% |
| Paint and materials | R4 200.00 | R2 900.00 | R1 300.00 | 31.0% |
| Outwork | R700.00 | R600.00 | R100.00 | 14.3% |
| Towing | R1 500.00 | R1 500.00 | R0.00 | 0.0% |
| Total | R28 936.80 | R20 895.87 | R8 040.93 | 27.8% |
Labour cost: 21 hours × R166.47. The job is made up; the shop's rates come from our labour rate guide.
Take off overheads of 21 hours × R233.92 = R4 912.32, and the job made R3 128.61, or 10.8% of what it charged. Had it taken the 16 hours quoted, with the parts at the quoted cost, it would have made R5 530.56, or 19.1%.
Profit as quoted
19.1%
R5 530.56, if the job had gone to plan.
Profit as done
10.8%
R2 401.95 less, for the same price.
Labour earned per hour worked
R358.90
Against a break-even of R400.39.
The labour line still shows a healthy margin, which is why a job like this looks fine on the invoice. Divide the labour charged by the hours the job really took, though, and it earned R358.90 an hour, below the R400.39 the shop needs to cover its costs.
The numbers to watch
A handful of measures, worked out every month, tell you more than any single job. Names differ from one source to the next, so pick one definition for each and stick to it:
| Measure | How to work it out | What it tells you |
|---|---|---|
| Gross profit by category | Charged less cost, for labour, parts, paint and materials and outwork, as a share of what was charged | Which kind of work pays, and where margin is leaking |
| Labour earned per hour worked | Labour charged ÷ the hours the work really took | Whether your labour covers your break-even rate |
| Effective labour rate | Labour charged ÷ hours sold | What you really get per hour sold, after discounts and insurers' rates, against your posted rate |
| Efficiency | Hours sold ÷ hours worked on jobs | Whether jobs take the time you quote |
| Utilisation | Hours worked on jobs ÷ hours at work | How much paid time goes on jobs rather than waiting, cleaning and fetching parts |
| Cycle time | Days from the car arriving to the customer collecting it | How long cars, and your money, sit in the shop |
| Comebacks | Cars that come back to have the repair fixed, as a share of jobs | How much rework you do for free |
Effective labour rate and utilisation as defined by BASF's VisionPlus glossary and FenderBender. Labour earned per hour worked is our own measure.
Paint and materials: used against charged
Paint and materials are the hardest cost to pin on one job, because tins, rolls and discs are shared. Mix everything on the scale and book each mix to the job: mixing systems can then report what each job used. Check the scale's totals against your paint supplier's invoices regularly, so waste and materials used off the scale show up. Our labour rate guide shows how to set your paint price per panel from the same invoices.
On insurance work the estimating system prices paint and materials for you. AZT, whose paint calculation estimating systems such as Audatex use in many countries, describes a way to check the allowance: take at least three typical paint jobs, work out what their materials really cost, divide by what the calculation allowed and multiply by 100. That's your own materials index, and above 100 the allowance doesn't cover what you use.
Costing insurance jobs
On an insurance job the assessment sets the labour times, the rates and the parts, and the insurer pays what it authorised less the customer's excess. Cost these jobs the same way, with three differences:
- Use what you were actually paid: the final costing, after any settlement discount or rebate the insurer takes.
- Count extra work only once it's authorised. Insurers pay for what they authorise, so extra damage you repair before the assessor has accepted it is at your risk.
- Cost each insurer's work separately. Rates, discounts and payment times differ, so one insurer's jobs can make money while another's don't.
Our guide to insurer agreements covers the rates and terms to check before you sign.
Why jobs lose money
| Cause | What to do |
|---|---|
| Hours over the quote | Find out why: a wrong labour time, damage missed at the quote, or rework. Fix the quoting, and get extra damage approved before you do the work. |
| Extra work without approval | You can't charge more than the approved estimate without the customer's approval, and insurers pay only for authorised work. Our quoting guide covers how to get it. |
| Parts prices moving | Price parts from current supplier quotes, give quotes a validity period and re-check before you order. See our parts pricing guide. |
| Rework and comebacks | Track them, find the cause, and remember the long warranties some insurers ask for. |
| Discounts and rebates | Know what each insurer takes off at final costing, and allow for it in what you accept. |
| Towing and storage you don't recover | Agree the charges up front and put them on the quote. See our guide to getting paid. |
| Cars waiting for parts or authorisation | Every day a car waits ties up a bay and your money. Chase authorisations and order parts early: imported back-orders can take about 21 working days, King Price tells its clients. |
A monthly job costing routine
- Cost every job once it's invoiced, or at least a regular sample.
- Total the month by category, and by private, fleet and each insurer's work.
- Work out labour earned per hour worked, and compare it with your break-even rate.
- Look at the five jobs that made the least, and find out why.
- Check the paint and materials used against what you charged for them.
- Feed what you learn back into your labour times, markups and paint price per panel.
