Equipment hourly rate calculator for skid steers and excavators

Add the owning cost per hour to the operating cost per hour. Price the operator on top.

Owning cost per hour = (yearly cost of the money + insurance + storage, registration and tax) ÷ hours it works a year

Operating cost per hour = fuel burned per hour × fuel price + maintenance and repairs + tires, tracks and wear parts

The yearly cost of the money is the loan payment that pays the machine down to its resale value. It covers depreciation and interest together.

Example: a 72,000-dollar skid steer sold for 32,000 dollars after 5 years, an 8% loan and 800 hours a year. Depreciation is 10.00 dollars an hour and interest 5.72. Insurance of 1,500 dollars and storage of 600 a year add 2.63, for an owning cost of 18.35.

Fuel (3 gallons an hour at 6.29 dollars), repairs at 6.00 and wear parts at 3.00 add 27.87. It breaks even at 46.22 dollars an hour without an operator.

Ownership costs and operating costs, the same split used in government equipment rate schedules.

• Ownership: depreciation, interest on the money tied up, insurance, storage, registration and property tax.
• Operating: fuel, oil and filters, maintenance and repairs, tires, tracks and wear parts.
• Priced on top: the operator, move-in and trailer time, office overhead and profit.

FAR 31.105 notes that labor is generally not in equipment rate schedules, and the Caltrans rate book leaves the operator out. That is why the calculator shows each rate with and without an operator.

Divide the break-even cost per hour by one minus your target margin.

Charge per hour = break-even per hour ÷ (1 − target margin)

Example: the skid steer above with a 40-dollar-an-hour operator breaks even at 86.22 dollars. At a 20% margin it charges 107.77 dollars an hour, 431.09 dollars for a half day and 862.18 dollars for an 8-hour day. Without an operator it charges 57.77 dollars an hour.

Get the operator cost from the labor burden calculator. It includes payroll taxes, workers comp and unbilled time.

Owning costs are paid whether the machine works or sits. Fewer hours means each hour carries more of them.

Example: the same skid steer at 400 hours a year breaks even at 64.57 dollars an hour, up from 46.22 at 800 hours. The calculator shows each machine at 50%, 75%, 100% and 125% of the hours you enter.

Use billable hours, from timesheets or job tickets, rather than hour-meter hours that include warm-up and yard moves.

Give each machine its own class, then run Reports > Standard reports > Business overview > Profit and Loss by Class for the last 12 months.

Each machine’s fuel, repair, tire, insurance and loan interest lines show in its own column. Classes come with QuickBooks Online Plus and Advanced. On other plans, total last year’s bills for the machine by vendor in Excel.

Our field guide on job costing in QuickBooks Online for contractors shows how to get machine hours onto each job.