How to calculate your sign shop hourly rate (and a rate per machine)

Your sign shop hourly rate is total yearly expenses plus the profit you want, divided by the hours you can bill. A shop with $100,000 in annual expenses, a 40% profit target and 1,960 billable hours lands at $71.43 an hour, according to A Comprehensive Beginner’s Guide to Pricing Signage on Signs101. Treat that number as a starting point. A flatbed printer and an install crew cost different amounts per hour, and one rate for both undercharges one of them.

The shop rate formula

The formula is (Expenses + Profit Goal) / Billable Hours = Shop Rate. Expenses cover salaries, utilities, contractor fees, insurance and taxes.

The baseline math from that guide:

Input	Value
Overhead expenses	$100,000
Target profit (40%)	$40,000
Total revenue goal	$140,000
Billable hours (40 hrs/wk x 49 weeks)	1,960
Shop rate	$71.43/hr

The 1,960-hour figure already subtracts holidays, vacation and time off. Lost time from admin work, machine setup and cleanup is not subtracted, and shop experience says it cuts into billable hours. If your crew bills fewer than 1,960 hours, the rate has to climb to recover the same expenses and profit.

Forum discussions on how to price efficiently put typical operating shop rates between $50 and $85 an hour, with many shops setting a firm one-hour minimum around $65.

Burden rate and your real labor cost

Your burden rate is what an hour of labor costs once payroll taxes, insurance and benefits sit on top of base pay. Burden includes employer payroll taxes, general liability insurance, workers’ compensation, and benefits like health insurance, a 401(k) or a Simple IRA, per the Installation rate vs man hours thread.

The same thread puts field installation labor at about 2.5 times the burdened labor rate. Multiply a crew member’s burdened hourly cost by 2.5 to get the rate you quote for field work.

Per-machine burden rates

A flat shop rate applied to every machine undercharges your most expensive equipment. At an 8-machine shop we work with, a 5 by 10 foot flatbed carries an hourly rate of $150.00, a $5.00 setup fee, a $5.00 minimum charge, a $10.00 minimum job cost, a $7.00 base rate per square foot and 12 inches of setup waste. The 64-inch latex roll printer at the same shop runs $105.00/hr, with its own $5.00 setup fee and $6.00 base rate per square foot.

Speed and ink profile change the real cost per square foot a lot.

5’ x 10’ flatbed:

Profile	Speed (sqft/hr)	Ink cost (per sqft)
Standard CMYK	516	$0.24
Quality CMYK	344	$0.36
High Quality CMYK	172	$0.72
Standard CMYK+White	161	$1.872
Quality CMYK+White	107	$2.10
High Quality CMYK+White	64	$2.81

64” roll latex:

Profile	Speed (sqft/hr)	Ink cost (per sqft)
Standard CMYK	269	$0.24
Quality CMYK	165	$0.36
High Quality CMYK	93	$0.72
Standard CMYK+White	138	$1.872
Quality CMYK+White	93	$2.10
High Quality CMYK+White	44	$2.81

Run a 4x8 panel, 32 square feet, through the flatbed at High Quality CMYK+White. At 64 sqft/hr the panel takes 30 minutes of machine time at $150/hr, or $75 in machine burden, plus 32 sqft x $2.81, or $89.92 in ink. Machine burden and ink come to $164.92 before you touch labor, substrate or markup. Run the same panel at Standard CMYK and ink drops to $7.68 while machine time falls to about 3.7 minutes. One flat per-square-foot number across both job types leaves money on the table or prices you out of the easy jobs.

The same shop also runs an eco-solvent roll printer that needs overnight gassing before lamination, a conveyor cutter for soft materials, a CNC router for hard materials, a heat assist laminator, a vinyl plotter and an applicator table. Each needs its own hourly rate, and none should inherit the flatbed’s rate for convenience. Vinyl Pig stores an hourly cost and a speed for each machine in your shop.

Mistakes that skew your rate

Some shops pick a number out of thin air. A flat $50/hr with no math behind it, which signmaking forums call the dart board method, rarely covers insurance, payroll tax and equipment depreciation.

Depreciation is the next gap. Daily machine value loss, based on replacement cost, belongs in the overhead number so the printer’s death does not arrive as a surprise (see the pricing guide).

Guessed print and setup times hurt too. Time trials that measure make-ready, material loading and actual print duration give you a real number, as laid out in How to Calculate Your Hourly Shop Rate.

For the cost-plus method applied to an actual panel or banner, see how to price vinyl signs. If you are still deciding between markup and margin on your rate sheet, read markup vs margin for sign shops. For vehicle work, including wrap removal and install labor, see how to price a vehicle wrap. And if your rate math keeps leaking profit between the quote and the invoice, check sign shop profit margins and margin leaks.