← Back to Bead BoardWhat should my welding shop rate be?
The number you charge per hour is the single biggest decision in your shop. Most welders guess low because they are quoting wage, not overhead. Plug your real bills in below and find out what you actually need to charge to stay open.
Your current rate of $75.00/hr is below break-even. Every hour on the clock at that rate is taking $27.86 out of your pocket.
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What a welding shop rate actually covers
A shop rate is not your wage. It is what a customer pays you for one hour of work so that, at the end of the month, every bill is paid and there is still something left in the bank.
That number has to cover four things: the welder's wage and payroll taxes, the shop's overhead (rent, insurance, truck, software, consumables), the cost of unbillable time (bidding, driving, picking up material, cleaning up, invoicing), and the profit margin you need to reinvest and survive bad months.
Welders on Miller's forum put it this way: "To charge $20/hr and actually make $20/hr profit, you'd need to charge clients $60–80/hr."That is the difference between a wage and a rate. A shop rate of $40/hr is not "cheap." It is going out of business in slow motion.
Typical welding shop rates by specialty
Ranges aggregated from Miller forum, WeldingWeb, Cliff's Welding cost guide, Angi, HomeGuide, and The Welders Edge on Medium, 2024–2026. No formal AWS or FMA survey publishes these. Your region and specialty will shift them 20% in either direction. Certified aerospace and nuclear pipe work can run well above these ranges.
How to calculate your shop rate step by step
- Add up monthly overhead. Every bill that shows up whether you do any work or not: rent or mortgage, utilities, general liability insurance, workers comp, property insurance, truck payment and fuel, equipment depreciation or replacement reserve, consumables not billed to a specific job (cutting discs, PPE, cleaning supplies, gas cylinder rental), software and subscriptions, payroll overhead (employer FICA, unemployment, PTO, training), accounting, licenses, marketing. Include an owner draw target — your time is not free.
- Do not include raw materials or subcontract. Those are per-job costs. You mark them up on the quote, typically 25–40%. Mixing them into overhead will blow up your rate math.
- Add up monthly payroll. Loaded wage × billable hours × number of welders. Loaded means wage plus employer taxes and benefits, not take-home.
- Figure your real billable hours. 40 × 4.33 weeks = 173 gross hours/month per welder. Take off holidays, PTO, admin, cleaning, bidding, and you land around 130–150. Forum consensus from Practical Machinist sits at 140. That is the number to use. Not 160. Not 173.
- Break-even rate = (overhead + payroll) ÷ billable hours. This is the number below which every hour on the clock is costing you money.
- Recommended rate= break-even ÷ (1 − your target margin). Use 0.25 for 25% net margin and the math gives you break-even ÷ 0.75. Do not use (1 + margin). That gives you a smaller, wrong number. ServiceTitan's HVAC labor rate calculator uses the divide form and every customer who double-checks your math will use it too.
The three ways welding shops work for free without noticing
1. Quoting wage instead of rate
You make $25 an hour at the day job and you charge $25 on the side. Feels fair. But on the side you are also paying for the truck, the welder, the insurance, the gas cylinders, and you are not getting any payroll taxes withheld. To end the year with $25/hr in your pocket, you need to charge somewhere between $60 and $80/hr. The rest gets eaten by reality.
2. Forgetting self-employment taxes and health insurance
Sole-prop and mobile welders especially. Federal self-employment tax alone is 15.3% of net. Add federal and state income tax and you are giving back a third of every dollar. Health insurance on the individual market for a family easily runs $1,500–$2,500/month. A $60/hr rate that does not cover these is a $35/hr take-home at best.
3. Not charging for unbillable time
Bidding, driving, picking up material, cleaning up, invoicing, following up on slow-pay customers — none of it bills to a specific job, but all of it eats your week. This is why operating factor matters more than the hourly rate itself. If you think you have 160 billable hours a month but you really have 110 because of unbillable time and low arc-on hours, your $100/hr rate is actually earning you $69/hr. Every real-world shop cost book says the same thing: the hours number is the one that kills most estimates, not the dollar number.
Arc-on time, operating factor, and why 173 hours is a lie
Operating factor is the fraction of a welder's clocked time that the arc is actually on. Miller puts the industry average across all arc welding at about 20%. That is 12 minutes of arc per hour. A well-run small shop running MIG or flux-core on production work can hit 25–30%. Stick welders usually land around 25%. TIG is slower, typically 20% or less. Field and mobile welding runs 10–20% because of travel, setup, and weather.
What does this mean for your rate? Take a 40-hour week. Gross hours: 40. After 8% for paid time off and holidays: 37. After another 6 hours of bidding, driving, and invoicing: 31. That is your billable week. Across a month: 134 hours. Not 173.
If you do not know your operating factor, start at 25% and track it for a week. First time through, most shops are worse than they think. Second time through, they fix it.
Questions welders keep asking about shop rate
What is a good shop rate for welding?
Forum data from 2024–2026 puts mobile repair welders at $75–$150/hr, production MIG shops at $60–$95/hr, mixed fab shops at $80–$120/hr, specialty TIG and pipe work at $100–$150/hr, and structural erection at $80–$120/hr. Ranges vary 20% by region and specialty. There is no formal AWS or FMA rate survey. These are aggregated from Miller forum, WeldingWeb, and cost-guide publishers.
How do you calculate shop rate?
Add up every monthly overhead line: rent, insurance, truck, consumables, software, payroll taxes, owner draw. Divide by billable hours per month. That is your break-even rate. Then divide by (1 minus your target profit margin) to get the rate you should actually charge. Using 1 + margin gives you a smaller, wrong number.
Is $75 per hour enough for a welding shop?
Depends on your overhead. A mobile welder running out of a truck with $3,000/mo overhead and 140 billable hours needs $21/hr just to break even on overhead, plus their own wage. A brick-and-mortar shop with $15,000/mo overhead needs $107/hr break-even before any profit. Plug your numbers into the calculator and see where you land.
What is the difference between break-even rate and the rate I actually charge?
Break-even is the number where you cover every bill with nothing left over. Recommended rate adds your target profit margin on top so there is something left for reinvestment, taxes, and bad months. If you charge break-even every job for a year, you go out of business the first time a customer stiffs you.
Should mobile welders charge more than shop welders?
Usually yes. Mobile work has truck costs, travel time, setup and tear-down, and lower arc-on time. 15% operating factor is common versus 25–30% in a shop. All of that drives the effective hourly higher. Mobile rates on Miller forum and WeldingWeb commonly run $100–$150/hr for experienced welders, with minimum first-hour fees.
How do I charge for consumables?
Two options. (1) Roll them into your shop rate by adding cutting discs, gas cylinder rental, PPE, tungsten, and cleaning supplies to monthly overhead. This keeps every quote simple. (2) Line-item them per job. Most small shops roll them into the rate because it is less paperwork and customers stop asking about a $4 cutting disc.
What operating factor should I use for small shop quoting?
Miller puts the industry average at about 20% for arc welding overall. A well-run small shop running MIG or flux-core on production work hits 25–30%. Stick welding typically runs 25%. TIG runs 20% or lower. Field and mobile work runs 10–20% because of setup and travel. If you do not know, start at 25% and track your actual arc-on time for a week.
Do I include raw materials in overhead?
No. Raw materials and subcontract costs are per-job, not overhead. You mark them up on the quote (typically 25–40%). Overhead is the cost of being open for business whether any jobs come in or not: rent, insurance, truck payment, software, consumables that are not billed to a specific job.
Other tools in the Tack Box
Formulas modeled after ServiceTitan's Labor Rate Calculator, adapted for welding and fab shops. Rate ranges aggregated from welding forums and cost-guide publishers, 2024–2026. Other Tack Box tools.