Calculate machine hourly rate
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What is the machine hourly rate and why is it important?
The machine hourly rate is a key parameter in production and cost calculation. It indicates how much it costs to operate a machine per hour, including all fixed and variable costs such as acquisition, maintenance, energy and tool costs. In industrial manufacturing, the machine hourly rate is often used to accurately calculate manufacturing costs and thus create quotes that are competitive and profitable. Without accurate knowledge of the machine hourly rate, miscalculations can occur that either reduce profits or overprice quotes. The machine hourly rate forms the basis for economic decisions in the production process.
A precise calculation of the hourly machine rate offers numerous advantages for companies. Cost potentials can be identified and savings realized through precise calculation. It also makes it possible to evaluate the profitability of individual machines and thus plan investments in a targeted manner. Exact hourly rates ensure that offers are in line with the market without causing losses. At the same time, they create transparency in the cost structure and help to optimize production processes. Companies that calculate the hourly machine rate can operate more competitively, secure their margins and increase efficiency in production – a significant advantage in a dynamic market environment.
How to calculate the machine hourly rate - step by step
The hourly machine rate is calculated using the formula:
Hourly machine rate [€/h] = sum of all machine-dependent costs [€] / machine running time [h].
This formula summarizes all fixed and variable costs of a machine and divides them by the annually planned operating hours. Fixed costs include, for example, depreciation, imputed interest and space costs, while variable costs such as energy and tool costs depend on actual usage. The machine running time indicates how many hours the machine is in use each year. This method enables companies to calculate precise hourly rates, which serve as a basis for cost transparency and competitiveness.
Several variables are required to calculate the machine hourly rate. Fixed costs include replacement costs, imputed interest, space costs and maintenance and repair costs. Variable costs such as electricity consumption, tool costs and consumables are calculated based on actual machine usage. Another decisive factor is the machine running time, which indicates how many hours the machine is in use per year. These variables are essential to realistically calculate the total costs. By recording them precisely, the machine hourly rate becomes a reliable value that is used in the cost calculation of quotations and in production planning.
A company uses a machine with replacement costs of € 400,000, a planned useful life of 10 years and annual maintenance costs of € 12,000. The occupancy costs amount to € 7,680 per year and the imputed interest is € 15,000 per year. The machine runs for 2,000 hours per year. The fixed costs add up to € 74,680. In addition, there are electricity costs of € 9/h for average usage. The hourly machine rate is calculated as follows:
(74.680 € + (9 €/h × 2.000 h)) / 2.000 h = 47,34 €/h.
This example shows how costs can be structured and precisely calculated.
The most important cost factors in detail
Machine running time in h/year
The machine running time indicates how many hours a machine is actually in operation per year. It includes the effective operating time and excludes downtimes such as maintenance or set-up times. A typical value for a machine in single-shift production is around 2,000 hours per year (250 working days x 8 hours). This figure is crucial for distributing the annual fixed costs over the actual operating hours in order to realistically calculate the machine hourly rate. Back to the calculator!
Planned useful life of the machine in years
The planned useful life describes how long a machine should be used productively before it is replaced or depreciated. It is essential for calculating annual depreciation. In industry, the useful life is typically between 5 and 15 years, depending on the type of machine and its load. A longer useful life reduces the annual fixed costs, but increases the likelihood of repairs and maintenance costs. Back to the calculator!
Replacement value in €
The replacement value indicates the estimated cost of replacing the machine at the end of its useful life. It can be higher than the acquisition cost, as inflation, technological developments or market changes can increase the price. The replacement value serves as the basis for depreciation and ensures that the costs of the machine are realistically included in the hourly machine rate. Back to the calculator!
Imputed interest in € per year
The imputed interest takes into account the costs of the capital commitment for the acquisition of the machine, regardless of whether this was financed by equity or borrowed capital. It reflects the lost profit that the capital could alternatively have generated (e.g. on the stock market). Imputed interest is usually calculated as a percentage of the average capital requirement. In the case of a loan with regular repayments, the average value is around 50% of the acquisition costs. Back to the calculator!
Maintenance costs in € per year
These costs cover maintenance, repairs and preventive measures to keep the machine in working order. They are often calculated as a percentage of the acquisition costs (approx. 2-4%). Regular maintenance extends the service life of the machine and reduces downtime. It is therefore an essential part of the fixed costs that are included in the hourly machine rate. Back to the calculator!
Installation area in m²
The installation area describes the space required by the machine in the production hall. It is specified in square meters and often also includes necessary work areas, safety zones and storage areas. The size of the area has a direct influence on the space costs, as larger machines or complex systems require more space. Back to the calculator!
Room costs in €/m² per month
The space costs are made up of the rental or operating costs for the production hall, based on the space used. These are usually stated per square meter and month. To calculate the hourly machine rate, the annual space costs are taken into account, which are calculated by multiplying the size of the space by the price per square meter and 12 months. Example: 80 m² x 8 €/m² x 12 months = 7,680 €. Back to the calculator!
Connected load of the machine in kW
The connected load indicates the maximum electrical power that the machine requires to operate. It is specified in kilowatts (kW). This value represents the upper limit that the machine can consume at full capacity. It is an important parameter for calculating the energy consumption and therefore the variable operating costs. Back to the calculator!
Average utilization of the maximum connected load in %
In practice, a machine is rarely operated at its maximum connected load. The average utilization is often between 40 % and 60 %, depending on the type of production (e.g. individual parts or series production). This percentage is used to calculate the actual energy consumption. Example: With a connected load of 60 kW and 50% utilization, the actual consumption is 30 kW. Back to the calculator!
Electricity costs in € / kWh
The electricity costs indicate how much companies pay per kilowatt hour (kWh) of electricity. They vary depending on the electricity provider, region and contract conditions. This value is decisive for calculating the energy costs of the machine. Example: A machine with 30 kW consumption at an electricity price of €0.30/kWh incurs energy costs of €9 per operating hour. Back to the calculator!
Tool costs per year in €
These costs include the expenses for the use of tools that are required for production with the machine. These include standard tools, wear parts and possibly special tools for specific jobs. As a guideline, tool costs are often estimated at 2-3% of the machine’s acquisition costs per year. Example: For a machine with an acquisition cost of €300,000, the annual tool costs amount to around €6,000-9,000. These costs are allocated to the variable costs, as they depend on the use of the machine. Back to the calculator!
