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Equipment Payments

Equipment operating cost calculator

Work out what it actually costs to run a machine for an hour, not just the fuel. It adds the ownership cost per hour (what the machine loses in value, spread over its working life), the fuel or power, the maintenance, and the operator, so the rate you charge for a job is above what the job costs you.

§ 01 Your numbers

Change anything. The answer updates as you type.

What the machine cost to buy. Used to work out the ownership cost per working hour.
What it will be worth when you retire it. Only the value it loses is an operating cost.
Total hours you expect to run it before retiring it. This spreads the value it loses across every hour of use.
Diesel, gas, or electricity to run it for an hour.
Oil, filters, tires or tracks, blades, and repairs, averaged to an hourly figure. The line people forget.
What you pay the person running it, per hour, including your payroll cost. Zero if you run it yourself and are not counting your own time.
Cost per hour
$51

Typical range $44 – $64

  • Ownership (value lost per hour)$5
  • Fuel or power$12
  • Maintenance & wear$6
  • Operator$28
  • Total$51
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$40 to $90 an hour is a typical mid-size machine with an operator. Confirm your billed rate is comfortably above it.

What this assumes, and where it could be wrong

Every one of these is a place the number could be off. They are here because you should be able to check our working, not because we are hedging.

THE COST TO RUN A MACHINE IS FOUR THINGS, AND THE FUEL IS THE CHEAP ONE.
Ownership (the value it loses, spread over its working hours), fuel or power, maintenance, and the operator. People quote the fuel because it is the number on the gauge, and they leave out ownership and maintenance because those do not show up hourly. That is exactly how a machine gets priced into a job at a loss: the rate covers the fuel and the operator and quietly eats the wear and the depreciation

Ownership per hour is the value the machine loses, divided by its working hours. A machine that loses $32,000 in value over 6,000 hours costs about $5.30 an hour just to own, before it burns a drop of fuel. Get the working-life hours roughly right and this line is the one that surprises people.

Maintenance is not just repairs. It is oil and filter changes, tires or tracks, cutting edges and blades, hydraulic service, and the big rebuild halfway through the life. Averaged to an hourly figure it is often as large as the fuel, and it is the line most likely to be left at zero and regretted.

Include the operator only if you are paying for the hour. If you run the machine yourself and are not costing your own time, set it to zero, but know that you are then leaving your labor out of the job's cost, which is fine for a decision and dangerous for a quote.

The defaults are ours and are a starting point. The price, the working life, the fuel, and the maintenance are yours, and the hourly cost is only as honest as the maintenance and ownership lines people most like to lowball.

Frequently asked questions

How do I calculate the cost to run a machine per hour?
Add four things: the ownership cost per hour (the value the machine loses, divided by its working-life hours), the fuel or power per hour, the maintenance and wear per hour, and the operator per hour. The calculator above sums them into the real hourly cost, which is the number you should be pricing a job above, not the fuel figure alone.
What is the ownership cost per hour of equipment?
It is the value the machine loses over its life, spread across the hours you run it. If a machine costs $40,000 and is worth $8,000 when you retire it after 6,000 hours, it loses $32,000, or about $5.30 an hour, before fuel or maintenance. It is a real cost even though no cash changes hands each hour, and leaving it out is the most common pricing mistake.
Why is my equipment costing more to run than I expected?
Almost always because the estimate only counted the fuel. Maintenance and wear are often as large as the fuel per hour, and ownership (depreciation) is a real hourly cost on top. Add all four and the true rate is usually well above the fuel figure people carry in their heads. That gap is why some jobs never seem to make money.
Should I include the operator in the machine's hourly cost?
For pricing a job, yes, include what you pay the operator per hour, because the job has to cover the labor as well as the machine. For comparing two machines you would run yourself, you can leave it out, since the operator cost is the same either way. The calculator lets you set it to zero for that case.

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