Calculator

Equipment hourly rate calculator

Put in what your machine costs to own and run. You'll get your break-even per hour and the rate that hits your margin, with and without an operator. Use your own numbers. The defaults are an example, not market rates.

Our own service: Prairie Contractor is run by Brent Guy, Saskatchewan. Prairie Digital Designs is a related service run by the same team; if you hire it, we are paid. Full disclosure.

1. Owning the machine (per year)

Purchase price ($) Before GST. Include SK PST if you paid it; you can't claim it back.

Expected resale value ($)

Years you'll keep it

Interest rate (%) Your loan rate, or what your cash could earn elsewhere

Insurance ($/year)

Licence, storage, other ($/year)

Billable hours per year Be honest about winter and slow weeks

2. Running it (per hour)

Fuel burn (litres/hour)

Fuel price ($/litre)

Maintenance and repairs ($/hour)

Tracks, tires, teeth, wear parts ($/hour)

3. Operator and overhead

Operator wage ($/hour) Pay yourself too, even as owner-operator

Payroll burden (%) CPP, EI, WCB, vacation pay on top of wage

Business overhead ($/year) Pickup, phone, accounting, software, website

Target profit margin (%)

Results update as you type.

Your numbers

Owning cost per hour: —
Operating cost per hour: —
Operator per hour (with burden): —
Overhead per hour: —
Break-even per hour: —
Rate to quote (with operator): —
Half day (4 h): —
Day (8 h): —
Bare machine rate (no operator): —
Yearly cost of owning: —

How it works

Depreciation = (purchase price − resale value) ÷ years kept
Interest = (purchase price + resale value) ÷ 2 × interest rate. This is the cost of the money tied up in the machine, on average over its life.
Owning per hour = (depreciation + interest + insurance + licence/storage) ÷ billable hours
Operating per hour = litres per hour × fuel price + repairs + wear parts
Operator per hour = wage × (1 + burden %)
Overhead per hour = yearly overhead ÷ billable hours
Rate to quote = break-even ÷ (1 − margin %). A 15% margin means 15% of the price you charge is profit, which is more than adding 15% to cost.

Worked example (the default numbers)

A $180,000 machine sold for $70,000 after 5 years at 7% interest, with $4,500 insurance and $1,500 other costs, working 1,200 hours a year:

Depreciation: (180,000 − 70,000) ÷ 5	$22,000/yr
Interest: (180,000 + 70,000) ÷ 2 × 7%	$8,750/yr
Owning: (22,000 + 8,750 + 4,500 + 1,500) ÷ 1,200	$30.63/h
Operating: 12 L × $1.60 + $14 + $6	$39.20/h
Operator: $38 × 1.18	$44.84/h
Overhead: 18,000 ÷ 1,200	$15.00/h
Break-even	$129.67/h
Rate at 15% margin: 129.67 ÷ 0.85	$152.55/h
Day (8 h)	$1,220
Bare machine at 15% margin: (30.63 + 39.20 + 15.00) ÷ 0.85	$99.79/h

Change billable hours first if you want to see what matters most. At 900 hours instead of 1,200, owning and overhead costs per hour go up by a third.

What this leaves out

Mobilization (float or trailer time to and from site), standby time and minimum call-out charges. Price these separately.
Major overhauls such as an undercarriage or engine rebuild, unless you've built them into the repairs per hour figure.
GST. Quote before tax, then add 5% GST (and 6% SK PST on taxable real-property work). If you rent the machine out in Saskatchewan, you must charge 6% PST on the rental, whether or not you're also doing real-property work. (PST-12, section O) See SK PST for contractors.
Income tax on your profit. See the take-home calculator.

Next step

Got your rate? Customers have to be able to find you. A simple website with your machines, service area and rates helps. See website and phone options.

Estimates only. This is not tax or financial advice. Your accountant can help you set depreciation and burden figures that match your books.