Generally, clothing labels should be no bigger than 4" x 0.75" in size. It is important to find the right balance between label size and legibility when designing clothing labels.
Many companies will opt to print the label onto fabric and stitch it on the inside of a garment. If the label is printed on fabric, the label should be large enough that the size information is easy to read but small enough that it does not interfere with the garment design. For simple and minimalist garments, where labeling may be seen, it is important to keep a consistent, clean and minimalistic look.
Moreover, it is important to consider the font, style, type and font size when creating the label. Typically, a crisp and clear sans serif font will be preferred over a thicker font. The type should also be bold and easy to read. When selecting a font size, an optimal size will be at least 8 to 10 points.
In conclusion, while there is not a set size for clothing labels, 4" x 0.75" is a good starting point. It is important to consider how legible the label will be, as well as the font, style, type and font size when creating the label.
Here is a helpful link for more information:
https://www.alliancelabels.com/what-size-should-a-clothing-label-be/