Costing & FinanceFree worksheetPDF, Excel, Word exportMachine Shops

Machine Hour Rate Worksheet

A single blended shop rate hides the fact that a five-axis machine costs far more per hour to run than a manual mill. This worksheet builds a machine-specific cost from purchase price, depreciation life, power, maintenance and the hours you can really sell.

Download:

Depreciation per hour	Power per hour	Maintenance per hour	Machine cost per hour
$3	$1	$2	$6
$4	$1	$2	$8
$11	$2	$5	$18
$1	$0	$1	$2

Average machine cost per hour

Highest machine rate

$18

This covers direct machine cost only. Add operator labor, floor space, insurance, software and overhead separately to arrive at a full shop rate. Use productive hours, not calendar hours.

Compare quoted rates to actuals

Optional: discuss reporting that compares work center rates with actual job cost.

Optional. The tool and every export work without this. No spam.

How to use the worksheet

List each machine and enter its purchase price, depreciation life, expected productive hours per year, average power draw and annual maintenance and tooling spend. The sheet calculates depreciation, power and maintenance per hour and adds them into a machine cost per hour. Edit the sample rows, export to Excel and add labor and overhead on top to reach the rate you quote.

The formula

Machine cost per hour equals purchase price divided by life in years divided by productive hours per year, plus kilowatts times the electricity rate, plus annual maintenance divided by productive hours. The key input is productive hours. A machine that runs 1,600 spindle hours in a year costs twice as much per hour as the same machine running 3,200, so be honest about utilization.

Use productive hours, not 2,080 paid hours
Use realistic average kW, not the nameplate maximum
Include tooling and wear parts in maintenance
Revisit the sheet when you add shifts or machines

Reading the result

Compare machine rates against what you charge. If a 5-axis machine costs a few times more per hour to run than a 3-axis VMC but you quote both at the same rate, parts that need the 5-axis are underpriced. Utilization is the lever: the same machine at higher hours has a lower rate, which is why filling the schedule matters.

Using it with your ERP

JobBOSS, E2 Shop System, Global Shop Solutions and ProShop all let you set a rate per work center. Enter the machine cost plus labor and burden as the work center rate so routings and quotes pick it up. Review it when the work center cost actuals drift from the quote assumptions.

Frequently Asked Questions

Is this my full shop rate?

No. It is the machine cost per hour only. A shop rate also includes operator labor and benefits, floor space, insurance, software, supervision and general overhead. Add those to get the number you use to price a job.

What depreciation life should I use?

Use your accounting policy or the realistic useful life of the machine, commonly 7 to 15 years for CNC equipment. Some shops use replacement cost instead of purchase price to avoid under-recovering for inflation.

How do I pick productive hours?

Estimate hours the spindle is actually cutting and billable, after setup, downtime and idle time. Pull actuals from your ERP or machine monitoring if you have it. Many shops find the real number is well below shifts times days.

Can I add rows for more machines?

Yes. Add as many rows as you need, then export. Totals and the average update automatically.

If you want work center cost actuals compared with your quoted rates automatically, Netray can help build that view from your ERP.

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