How to use the hourly equipment cost calculator
Equipment cost splits into owning cost and operating cost. Owning cost accrues whether or not the machine moves, and depreciation is its largest component. Operating cost appears only while the machine runs and covers fuel, repairs and the operator. This calculator converts both into a single hourly rate.
Hourly depreciation is the purchase price less salvage value, divided by useful life in years multiplied by annual operating hours. Repair and maintenance is estimated as a percentage of that depreciation when no maintenance history is available, which is the convention used in equipment cost references such as the Caterpillar Performance Handbook.
The resulting hourly rate drops straight into an estimate as the equipment line of a unit price, or into a job cost report as the internal charge rate for the machine. The shift figure assumes eight working hours, so multiply the hourly rate by your actual shift length if it differs.
Tracking this rate over time is also a fleet management tool. If the calculated internal cost consistently exceeds the local rental rate, utilization is too low and the fleet size or the dispatch plan deserves another look.
Frequently asked questions
It varies with how hard the machine works. Earthmoving equipment such as excavators and dozers is often carried at 60 to 100 percent of the hourly depreciation, while lightly loaded units like generators and cranes sit well below that. Your own maintenance history is always the better source.
Yes. Compare the total hourly cost against the hourly equivalent of a rental quote including delivery and pickup. Remember that a rental stops costing money when it goes back, while an owned machine keeps depreciating during idle weeks.
Depreciation gets spread too thinly and the hourly rate comes out too low, which quietly understates job cost. Use the hours the machine actually runs, not the hours it is available, so that idle time is charged where it belongs.