Frequently asked questions

Fair Price is an online tool that works out what a garment actually costs to make, and what it would cost if the workers who make it were paid a target wage instead of the legal minimum.

It does this in two halves. First you build a picture of the factory: its workforce, hours, wages, overhead and capacity. That produces a cost per productive minute. Then you cost a product style against that factory: fabric, trims, sewing minutes, outsourced work and mark-up. The result is an FOB price per piece, shown twice side by side, at today’s wages and at the target wage.

The gap between those two numbers is the point of the whole exercise. It is usually far smaller than people expect, and Fair Price makes it a figure both sides can look at.

Two groups, working on the same file.

Brands, retailers, buying houses and agents use it to understand what sits inside a quoted price, to see what a wage increase would really cost per garment, to compare suppliers on structured cost data, and to hold the same conversation across a whole supplier base rather than one factory at a time.

Factories and manufacturers use it to build up a price from their own cost structure instead of negotiating down from a target, and to show a customer exactly what a higher wage would mean for the piece price.

Consultants, NGOs, trade unions and researchers also use it, usually to check or support a costing conversation between the other two.

A fair price covers a living wage, safe working conditions and environmental investment, not simply the lowest number on the table. Fair Price shows the exact additional cost of closing the living-wage gap, expressed as a small, auditable figure.

Fair Price is developed by a non-profit foundation with more than 20 years of experience improving working conditions in the garment industry, and builds on the labour-minute costing methodology originally developed by Fair Wear.

Six figures sit at the centre of it, all of them a cost per productive minute at the factory:

Every one of those is worked out twice: once on the wages the factory pays now, and once on the target wage.

The labour minute value is the true cost of one minute of work at a factory, calculated from real workforce data: wages, overtime, benefits and employer on-costs. A minute is used because it is the one unit that a factory cost and a garment have in common.

A factory does not have a wage bill per T-shirt. It has a monthly wage bill and a monthly capacity. Divide one by the other and you get what a minute of production costs. A garment needs a known number of minutes to sew. Multiply, and the factory’s real labour cost lands on that specific garment.

It also means a wage increase stops being an abstraction. Raise the wage bill and the cost per minute moves by a known amount. A garment taking 22 minutes picks up 22 times that.

The tool builds the price up in the order a factory would:

The result is the FOB price per piece, and the total order value. Each line is shown at current wages and at the target wage, so you can see which parts of the price move and which do not.

The current column uses the wages the factory pays today. The target column uses the target wage you set in step 7 of the Factory tab.

Only the wage-driven lines move between the two. Fabric does not get more expensive because a sewing operator is paid more. That is usually the most useful thing on the screen: the target FOB price is often a few percent above the current one, not the multiple people assume.

Overtime pay and employer on-costs are both driven by the wage, so Fair Price lifts them too, and lets you type over them if you know they will behave differently.

Fair Price calculates labour costs at the current wage, for example the legal minimum, and against a projected target wage such as a future legal minimum, a CBA wage or a living wage, so you can see exactly what each step costs per garment.

You decide the target, and the tool offers references rather than imposing one. Step 7 holds a dropdown of published benchmarks: the Global Living Wage Coalition, the Asia Floor Wage, Wage Indicator, and trade union wage demands where there is one on file. Where Fair Price holds a figure for the country it shows it with its source and date, and you can apply it with one click.

For Cambodia there is also the ACT collective bargaining agreement, which works differently: it is the factory’s own lowest paid wage plus the increase the agreement sets.

You can also ignore all of them and type a figure. Many factories and brands do, because they are working towards something negotiated rather than published.

Twelve steps on the Factory tab, most of which a factory already has on hand: currency and exchange rate, factory details, workforce numbers, working hours and overtime, paid leave, the monthly labour cost, the wage gap, the labour cost at the target wage, overhead, investment in environment and safety, and the production base. The twelfth step is a summary.

On the Style tab there are seven shorter steps for the product: currency, brand and order details, materials, sewing minutes and CM cost, outsourced processes, mark-up, and brand share.

Nothing has to be perfect on the first pass. Every figure can be changed later and the whole costing recalculates as you type.

Yes. Step 2 asks which kind of facility this is, and the costing changes accordingly.

Three ways, and they produce the same result.

An upload always creates a new factory. It never overwrites one you have already saved, and the tool reports how many rows it recognised and which it could not find.

Small helper tables that sit behind the fields where a single number is hard to produce from memory. There are aids for regular wages, benefits and bonuses, employer on-costs, overtime, piece rate pay, workforce numbers, environmental investment, knitting machine minutes and maternity or paternity leave.

Each one asks for the parts rather than the total, does the arithmetic, and writes the result into the field when you press Apply. Nothing changes until you do. They also carry the national rule where there is one, for example what a country’s law counts as the overtime base and what it leaves out, so you can see the rule while you work rather than looking it up elsewhere.

Yes. The Scenario builder puts a third column next to current and target. You pick the variables you want to vary, for example the wage, the overtime hours, the fabric price or the mark-up, and set an alternate value for each.

All three columns are costed the same way, so you can see what a shorter working week or a different fabric does to the FOB price without losing the two figures you started with.

A brand buying ten percent of a factory’s output cannot close the whole wage gap on its own, and should not be asked to. Brand Share works out what proportion of the factory’s capacity one brand actually uses, and therefore what proportion of the gap that brand’s own orders could cover.

Minutes are the most accurate basis, since a complex style uses far more capacity per piece than a simple one. Where minutes are not available you can use pieces or annual value instead.

The result is shown as a potential wage increase per worker, per month and per year, if that brand paid the target FOB price on everything it buys from the factory.

One chart with the legal minimum wage, the factory’s actual average wage and the target wage side by side, so the distance between them is visible rather than described. Where Brand Share has been completed, it also shows the increase that one brand’s orders could fund.

Next to it, when gender wage data has been uploaded, a second chart compares men’s and women’s wages.

Yes. On step 3 of the Factory tab you can download a template, add one row per production worker with gender and monthly base wage, and upload it.

Fair Price then reports the average, the median and the most common wage for men and for women, and the gap on each. Median and mode matter here: an average can hide a gap that the middle of the distribution shows clearly.

The template asks for no names and no identification numbers, and the list of individual wages is never stored. Only the results are kept.

Exports carry the figures in both the input currency and the display currency, and can be shared with buyers, auditors, NGOs and certification bodies, or used for sustainability reporting.

Both, yes. A factory can build its own costing and send the result to a customer. A brand can work from a completed template without the factory ever opening the Portal.

The tool is at its most useful when both sides are looking at the same file, because then the discussion is about which number is right rather than about whose number to believe.

Data is saved on a secure server in the European Union. See our Privacy and Cookie Policy for details.

The factory decides. While Fair Price encourages transparency in costing, it is always the factory’s prerogative to decide what information to share, and with which customer. Each organisation works in its own account, and no one can look into another organisation’s data.

A factory that fills in the upload template and e-mails it has shared those figures, and nothing else. A brand that sends back a style report has shared the costing, and nothing else. Both files are ordinary Excel and PDF documents, so each side can read exactly what it is handing over before it sends it.

The file is read in your browser and the individual wages are discarded immediately. Only the results are kept: the counts, the averages, the medians, the most common wages and the gaps.

Those results travel with the factory into a saved factory and into the Excel export. The list of wages does not, and cannot, because it was never stored.

No. The tool itself does not verify anything. It calculates with the figures it is given, and if those figures are wrong the output is wrong in the same direction. It should never be used to claim a living wage is paid simply because the tool was used.

It is a costing and negotiation tool, not an assurance one. It sits alongside audits, programmes and certifications rather than replacing them.

Upon request, the Fair Price Foundation can arrange an on-site visit to a factory to verify that the data entered into the Portal (workforce, working hours, labour costs, etc.) and the number of minutes for a given product style are plausible. The factory will then show as verified in the dashboard. This verifies the data behind the costing, not the wages actually paid.

No. Fair Price shows what a higher wage would cost and what it would take to fund it. Whether that money is paid, and whether it reaches workers rather than stopping somewhere on the way, is a matter for the brand, the factory and the workers’ representatives.

What the tool does is remove one common obstacle, which is that nobody at the table knows the size of the number they are arguing about. It is a means to an end: more transparent costing and shared responsibility between buyers and suppliers to raise wages.

They are researched from the national legislation and from the publishing organisations, each shown with its source and the date it was last checked, and they are reviewed as new rates are gazetted. Minimum wages change often, and in several countries they vary by region or by grade, so the tool shows the figure it holds rather than applying it silently.

They are a reference, not an authority. Every benchmark is optional: you can always enter your own figure. While every effort is made to ensure that the minimum wage levels and target wage benchmarks provided are accurate, mistakes may occur.

Tell us. Corrections to a wage rate, a benchmark or a national rule are the most useful feedback we get, and they go into the tool for everyone. Write to contact@fair-price.org.