A mower or skid steer costs money every hour it runs — ownership (spread over annual hours) plus operating (fuel, maintenance per hour). The sum is the rate to build into bids.
The example
$6,000/yr own, 800 hrs, $4.50 op.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | 6000/800 + 4.50 | — |
| 3 | Per hour | → $12.00 |
The formula
The formula:
How it works
How it works:
- Ownership cost = depreciation + interest + insurance + storage, per year.
- Spread it over annual hours for ownership cost per hour.
- Add operating cost per hour — fuel, oil, blades, repairs.
- More annual hours lowers the rate — idle equipment is expensive per hour.
Idle equipment has a high hourly cost. The ownership half is fixed — a $6,000/year machine costs $7.50/hour at 800 hours but $15/hour at 400 — so a mower that sits is quietly expensive. Knowing the true machine rate lets you price jobs to recover it and decide between owning, renting, or sharing. Below a certain annual usage, renting beats owning the iron.
Try it: interactive demo
Ownership cost, annual hours, operating/hr.
Variations
Ownership per hour
Spread fixed cost:
Own vs rent
Compare a rate:
Add labor
Operator + machine:
Pitfalls & errors
Both costs. Ownership and operating — not just fuel.
Real annual hours. Use actual usage for that machine.
Zero hours. An unused machine gives #DIV/0!.
Practice workbook
Frequently asked questions
How do I calculate equipment hourly cost in Excel?
Should I own or rent?
Why does usage change the rate?
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