How The Flat Rate Mechanic Pay System Works

In this video, we will go over how the flat rate mechanic pay system works along with how much you can expect to make as a flat rate mechanic. We will be talking about some of the advantages and disadvantages of working as a flat-rate mechanic vs and hourly paid mechanic.

Flat rate pay is when someone is paid per job instead of a salary or per hour. This flat-rate system motivates workers to finish as many jobs as possible but can lead to sloppy work if the workers sacrifice quality for quantity. Some shops pay their mechanics a flat-rate fee.

Working a 40 hour week as a mechanic does not mean you will get paid 40 hrs. You will only get paid what you flagged for hrs that week. If you out preform you could get paid much more than 40 hrs but if it was a slow week you may have been at work for 40 hrs and still only get paid 20$ so working as a flat-rate mechanic definitely has its ups and downs.

Being a Flat Rate Mechanic – How Does it Work? And Is it Better?

Being a mechanic is a rewarding and fulfilling career. You learn invaluable and sought-after skills that allow you to provide a crucial and much-needed service to your community. Whether you are currently training to be a mechanic, or an established and practicing professionals with years of experience under your belt, you might consider to yourself the important question of how best to operate — using a flat rate mechanic pay system or an hourly pay system.

In this piece, we’ll explore the key differences between the two in how they work, as well as the advantages and drawbacks of each approach. Is flat pay better than hourly? How much do flat rate mechanics make? You’ll hopefully know more clearly by the end of this article.

How a flat rate pay system works
Put simply, the flat rate payment system is one in which the mechanic gets paid a fixed pre-determined amount rather than charging for the number of hours it took to complete that same job. For instance, let’s say a mechanic is repairing a car’s water pump. A mechanic working on an hourly rate of around $80 an hour would make 80 times the number of hours it took. A flat rate mechanic would earn the preset price — say $300 — no matter how long the job took to finish.

The price that the flat rate mechanic uses typically comes out of a repair handbook like Mitchell’s, in which will be laid out typical labor times and rates that are representative of a trained and experienced mechanic doing the same job somewhere else. They give the consumer a reference point, and most mechanics also use them as a starting point for developing prices for their services. The difference between the two payment methods can be found mostly in their flexibility — more on that later.

I’m not writing today to tell you that one system is definitely better than the other. It really depends on your experience, energy level and overall motivation to get work done. To take the above example as a demonstration, the hourly mechanic makes more money if that job was complicated or made difficult by other circumstances, forcing them to use more hours to complete it. Their total bill might come to $400 if it took four hours. The flat rate mechanic earns $300 regardless of speed, meaning that the faster they work, the better their rate of pay becomes. If they change the pump in one hour, then they’ve earned almost four times as much as the hourly mechanic. But the opposite is also true, whereby a 10-hour completion still results in just $300.

Let’s dive in and look more closely at the advantages and disadvantages of the flat rate mechanic pay system.

Advantages of a Flat Rate Pay System

1. Helps experienced mechanics boost their income and grow their business
   Running a flat rate pay system is all about efficiency. The more jobs you finish in a day, the higher your income will be. This can mean a serious boon to those mechanics who have accumulated years of experience on many common job types. This experience allows them to finish each task far ahead of the recommended “typical” labor time listed in an industry guide book. A job that is listed as typically being finished in 4 hours might be a 2-hour task to the mechanic with 5 or more years’ experience under their belt.

So, whether you’re a contracted mechanic working in a dealership, or a self-employed mechanic with your own shop, the flat rate system is a door to more income and/or more cash to invest and grow your business.

1. It motivates and incentivizes greater productivity
   Dealerships and garage owners like the idea of their employees adhering to fixed rate payment models because it incentivizes them to work harder and be more productive. It’s logical to suppose that when you are on an hourly rate, it’s in your interest to work more slowly and as inefficiently as you can. It’s a system in which the slow get rich quicker. A flat rate means the only way to financial stability is through more results.
2. It pushes for greater organization and efficiency
   A garage that runs on pure results is one that will have to be more streamlined and organized in its daily operation. When the goal is to finish as many jobs as possible in one day, the last thing you want is for mechanics to be scrambling around looking for parts, for fluids and other items they need to complete those jobs. You’ll want a clean, well-arranged and ergonomically sound workplace in which a mechanic can operate with ease and without having to think where the next tool they need is hiding.
3. Makes a typical garage more profitable
   Any garage operator will likely be aware that the mechanic’s bread and butter is still found in routine maintenance jobs that are uncomplicated for a professional, but still beyond the skills of a layman. Things like an oil change, air/oil filter changes, spark plug maintenance, tire rotation/changes, transmission fluid check, coolant level check etc. Many of these routine jobs can easily be done inside of an hour, which means that the hourly mechanic is selling themselves somewhat short by not having a fixed rate. The fixed rate mechanic can sail through these jobs piling up the invoices day by day.

But as I said earlier on in this article, I’m not here to tell you that one way is definitely better than the other. There are also good reasons not to adopt this payment model.

Drawbacks of a Flat Rate Pay System

1. Complex jobs become a financial drain
   A good mechanic knows that no matter how simple a job “typically” is, there are always many cases in which it is complicated by other circumstances. If you would normally charge a flat rate of $100, but the job ends up taking you half the day, then it quickly turns into a very unproductive and non-profitable day. This is especially true when you factor in the many running costs of your mechanic business.
2. Division of labor can get messy
   Let’s say you’re running a garage and you employ four mechanics. All are qualified, but each has a different level of experience on the shop floor. Your instinct may, therefore, be to allocate the more expensive paying jobs to the most experienced mechanic because they can guarantee the quality within the limited timeframe. This leaves younger mechanics feeling frustrated, and also missing out on key opportunities to learn and grow.
3. It can negatively impact quality
   Another concern with the flat rate system is that in order to meet quotas, targets or just to make more money in the short term, a mechanic will get sloppy or slapdash with their work. A car’s engine and connected parts are a finely tuned machine in which every part has to be in optimal condition in order for it work properly. Working in a rush could lead to mistakes that negatively impact your garage’s reputation, and your long-term earnings.

In conclusion
As you can see, it’s not a simple question. You have to consider all the factors of your own situation before you decide whether or not to take up a flat rate mechanic pay system. How much do flat rate mechanics make? That depends on their experience, efficiency and efficacy in their work. Is flat pay better than hourly? That depends on whether or not you have what it takes to make it work for you.

If you prefer a low-pressure work environment, in which you have the time and space to learn, grow and develop your skills carefully over time, while ensuring good quality work and customer satisfaction, then an hourly rate might be better for you. If you prefer a high-pressure, high-stakes and fast-paced garage environment where you are focused on quantity and results, then a flat rate system is the right choice.

I hope this article is helpful for those still making up their minds. Take your time and make sure you consider as many relevant factors as possible before you choose your business direction. This is not something to take lightly. Keep an eye on my blog for more articles and videos designed to help mechanics gain from the knowledge and experience of a veteran mechanic!

About Me:
I’m a master-certified mechanic (also ASE- and Diesel-certified) with 20 years’ industry experience. I started working as a mechanic when I was very young. My entire family are gear heads, and mechanic work has always been a huge and important part of my life. I’ve developed a wide range of experience across the country, working under both a flat rate system and an hourly system. I’m glad to share my experiences here on this blog and hope to provide insight to other aspiring mechanics out there.

Hopefully, this video will help you decide what is better for you.

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