Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Machine hourly rate (fully burdened)
$43.74
Machine-only rate (excl. labor)
$9.74
Total annual cost to own & run
$166,200
Annual depreciation
$13,500
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How to use this
- 1Enter machine purchase price ($).
- 2Enter salvage value at end of life ($).
- 3Enter useful life (years).
- 4Enter usable hours per year (hrs).
- 5Enter power + consumables per year ($).
- 6Enter allocated shop overhead per year ($).
- 7Enter operator burdened labor rate ($/hr).
- 8Read your machine hourly rate (fully burdened) on the right — it updates as you type.
- 9Hit Share to keep the scenario or send it to someone.
About this calculator
Job shops that quote off labor rate alone routinely lose money on jobs that hog machine time but use little labor, like long unattended CNC runs. The machine hourly rate bundles ownership cost (depreciation and financing), operating cost (power, consumables, tooling wear), floor overhead allocated per machine, and the operator's burdened labor rate, divided across the hours the machine actually runs in a year. This is the number you should be quoting against, not a generic shop rate. Depreciation here uses straight-line over the machine's useful life to salvage value, which is standard for internal costing even if your tax depreciation schedule differs. Annual usable hours account for realistic uptime, not 8,760 calendar hours or even a naive 2,080 shift-hours figure, since maintenance, changeovers, and downtime always eat into it.
Worked example
Using the values the calculator loads with:
Inputs
- Machine purchase price: 180000 $
- Salvage value at end of life: 18000 $
- Useful life: 12 years
- Usable hours per year: 3800 hrs
- Power + consumables per year: 9500 $
- Allocated shop overhead per year: 14000 $
- Operator burdened labor rate: 34 $/hr
Results
- Machine hourly rate (fully burdened): $43.74
- Machine-only rate (excl. labor): $9.74
- Total annual cost to own & run: $166,200
- Annual depreciation: $13,500
What each field means
Inputs
- Machine purchase price ($)
- The machine purchase price used in the calculation, measured in $. Starts at 180000 $ so you have a working example on load.
- Salvage value at end of life ($)
- The salvage value at end of life used in the calculation, measured in $. Starts at 18000 $ so you have a working example on load.
- Useful life (years)
- The useful life used in the calculation, measured in years. Starts at 12 years so you have a working example on load.
- Usable hours per year (hrs)
- The usable hours per year used in the calculation, measured in hrs. Starts at 3800 hrs so you have a working example on load.
- Power + consumables per year ($)
- The power + consumables per year used in the calculation, measured in $. Starts at 9500 $ so you have a working example on load.
- Allocated shop overhead per year ($)
- The allocated shop overhead per year used in the calculation, measured in $. Starts at 14000 $ so you have a working example on load.
- Operator burdened labor rate ($/hr)
- The operator burdened labor rate used in the calculation, measured in $/hr. Starts at 34 $/hr so you have a working example on load.
Results
- Machine hourly rate (fully burdened)
- Returned as a money amount in US dollars and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Machine-only rate (excl. labor)
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Total annual cost to own & run
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Annual depreciation
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Should I include labor in the machine rate or quote it separately?
Either works as long as you're consistent. Bundling it into one rate simplifies quoting for lights-out or unattended operations. Separating them helps when the same machine sometimes runs unattended overnight and sometimes needs a dedicated operator, since the labor portion changes but the machine portion doesn't.
What usable hours figure should I use?
Start from your calendar hours available (shifts × days), then subtract actual historical downtime for maintenance, changeovers, and no-work gaps. Most single-shift shops land between 1,600 and 2,000 usable hours; multi-shift or lights-out CNC operations can hit 3,500-5,000.
How do I handle a fully depreciated machine that's still running?
Drop the depreciation line to zero or replace it with a smaller 'replacement reserve' figure so you're still saving toward the eventual replacement. Running the rate at zero depreciation understates true cost and can lead to underpricing new work.
Does this rate include profit margin?
No — this is a cost rate, not a sell rate. Add your target margin or use it as the base for a separate markup calculation before quoting a customer.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
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Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Machine Hourly Rate Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/machine-hourly-rate
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/machine-hourly-rate" target="_blank" rel="noopener">Machine Hourly Rate Calculator — RevenueLab</a> (2026).</p>
Source: [Machine Hourly Rate Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/machine-hourly-rate) (2026).