The parts-to-labor ratio tells you how your shop's revenue splits between selling parts and selling time. It's a quick health check on your job mix and pricing.
A ratio near 1.0 means parts and labor are balanced; many general shops land around 0.8–1.2.
The example
Last month the shop billed $36,000 in parts and $30,000 in labor.
| A | B | |
|---|---|---|
| 1 | Label | Value |
| 2 | Parts revenue | $36,000 |
| 3 | Labor revenue | $30,000 |
| 4 | Parts-to-labor ratio | 1.20 |
The formula
Parts revenue measured against labor revenue:
How it works
What it means:
- Total your parts sales for the period (B2) and your labor billings (B3).
B2/B3expresses parts as a multiple of labor.- 1.20 means you sold $1.20 of parts for every $1.00 of labor.
- Track it over time — a sharp move signals a change in job mix or pricing.
Also useful: parts as a share of the total ticket, =B2/(B2+B3), which here is about 55%.
Try it: interactive demo
Enter parts and labor revenue — the ratio and mix update.
Variations
Parts share of the ticket
Express parts as a percentage of total revenue.
Labor-to-parts (flip it)
Some service writers prefer labor as the numerator.
Pitfalls & errors
Compare revenue to revenue. Mixing parts cost with labor billings gives a meaningless ratio.
Diagnostic-heavy shops run labor-heavy (lower ratio); parts-heavy shops (tires, batteries) run higher. Benchmark against your own niche.
Practice workbook
Frequently asked questions
What's a healthy parts-to-labor ratio?
Should I use revenue or cost?
Why did my ratio jump?
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