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What Does My Machinery or Equipment Really Cost per Hour?

For excavators, tractors, chippers, mowers and any machine that earns its keep by the hour. See what it really costs to own and run for every hour it works.

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Ownership

Hours it actually works. The hour meter is the best guide.

Interest only, not principal repayments.

If it applies.

Storage, permits, tracking.

Operating

Charge-out (optional)

For the machine only. Work out the operator's rate with the hourly rate calculator.

Profit target as a

Leave blank to see cost only. A margin must be under 100%.

Your result

Enter your figures to see your result straight away. Nothing is sent anywhere.

How it's worked out

Ownership costs are spread across the hours the machine works each year. Operating costs are added per hour.

  1. Wear and replacement a year(Purchase price − expected resale value) ÷ years you keep it
  2. Fixed cost per hour(Wear and replacement + finance interest + insurance + registration + other fixed) ÷ operating hours
  3. Operating cost per hourFuel per hour × fuel price + (servicing + repairs + wear parts + other) ÷ operating hours
  4. True cost per hourFixed cost per hour + operating cost per hour
  5. Charge-out using a marginTrue cost per hour ÷ (1 − margin %)
  6. Charge-out using a markupTrue cost per hour × (1 + markup %)

The fewer hours a machine works, the more each hour has to carry.

Worked example

A $120,000 excavator expected to sell for $45,000 after 7 years, working 900 hours a year. Finance interest, insurance and other fixed costs come to $10,000 a year. It burns 6 L an hour at $2.00, and servicing, repairs, tracks and other running costs add $13,500 a year. The owner wants a 20% margin.

Worked example figures
Price / resale / years$120,000 / $45,000 / 7
Hours a year900
Fuel6 L/hr at $2.00
Worked example results
Fixed cost per hour$23.02
Operating cost per hour$27.00
True cost per hour$50.02
Machine charge-out at 20% margin$62.52

At 450 hours a year the same machine would cost $88.03 an hour.

Assumptions

  • If you're registered for GST, enter costs excluding GST. If you're not, include it.
  • Wear and replacement is a straight-line estimate. Resale values vary with condition and market.
  • The operator isn't included. Work out their rate with the hourly rate or employee cost calculators.
  • Your business overheads aren't included. Cover them in your labour rate or add them to other fixed costs.

This calculator estimates equipment costs from the figures you enter. It's a guide based only on the figures you enter, not financial, accounting, tax or legal advice.

FAQ

Machinery Cost per Hour questions. Answered.

Why does the hourly cost change so much with the hours worked?

Ownership costs are the same whether the machine works or sits in the shed. Spread over fewer hours, each hour carries more.

Does this include the operator?

No. It's the machine only. Add the operator's cost using the hourly rate or employee cost calculator.

Should I include finance repayments?

Only the interest. The purchase price is already counted through wear and replacement.

Can I use this for smaller equipment?

Yes, for anything you use by the hour: mowers, chippers, compressors, trailers and plant.

Your next step

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Machine time is a real job cost. BuzzBrain Time Boost works out the true cost of each job before you quote, keeps quotes moving and shows what each job actually made. Free during private beta testing on iPhone and iPad.

See BuzzBrain Time Boost →

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