Machine Hour Rate Calculator
The hourly cost of owning and running a machine — depreciation, interest, maintenance, floor space, power, tooling and operator — for quoting jobs and comparing equipment.
Spread the purchase price less residual value over the machine’s life in hours for depreciation; add interest on the average capital tied up; add yearly maintenance (a percentage of price), floor space, insurance; add the power it draws at your tariff; add consumables and, if you quote all-in, the operator.
How the machine hour rate calculator works
Spread the purchase price less residual value over the machine’s life in hours for depreciation; add interest on the average capital tied up; add yearly maintenance (a percentage of price), floor space, insurance; add the power it draws at your tariff; add consumables and, if you quote all-in, the operator. Divide the yearly costs by the hours it actually runs — a machine that runs 1,000 hours costs twice per hour what it does at 2,000.
Formula: rate = (depreciation + interest + maintenance + space + insurance) ÷ hours per year + power + consumables + operator
Worked examples
| Inputs | Machine hour rate | Note |
|---|---|---|
| A 250,000 machine, 2,000 h a year, with operator | 80.13 | 85.13 an hour |
| Same machine at 1,000 hours | 103.5 | 103.50 |
| A small CNC router, machine only | 11.06 | 10.58 |
FAQFrequently asked questions
Why do the hours matter so much?
Fixed costs are the same whether the machine runs or sits; spread over fewer hours they cost more per hour. Utilisation is the biggest lever on the rate — and the reason quotes from busy shops can be lower.
Should I include the operator?
For an all-in job rate, yes; for comparing machines or deciding on automation, quote the machine alone and add labour separately. The calculator shows both.
What maintenance percentage?
Two to five percent of the purchase price a year for general machine tools, more for high-wear equipment or old machines. Include service contracts and spares.
What about profit?
This is the cost rate. Add your margin and overhead recovery on top when quoting; many shops mark the machine rate up 20–40%.
Where these figures come from
- Nakajima (1988) — Introduction to TPM — the origin of Overall Equipment Effectiveness and its six big losses
- Health and Safety Executive — the UK workplace safety regulator
Last checked: September 2026. Definitions follow standard operations-management practice; where plants commonly differ, the page says so.