CNC Machine Hour Rate Calculator
Calculate your precise hourly machine rate (MHR) to ensure profitable job costing.
Machine Acquisition & Fixed Costs
Variable & Running Costs
Please fill in all required fields with valid numbers.
Hourly Cost Breakdown
Depreciation Cost / Hour:
Space & Rent Cost / Hour:
Power Consumption / Hour:
Maintenance / Hour:
Operator Labor / Hour:
Total CNC Machine Hour Rate:
*Calculated based on annual utilization.
Mastering CNC Machine Hour Rate Calculation
Calculating the correct Machine Hour Rate (MHR) is fundamental for any CNC machining business. If you underestimate your rate, you lose money on every part produced. If you overestimate, you lose bids to competitors. While many shop owners perform a CNC machine hour rate calculation in Excel, this online tool provides an instant, error-free breakdown of your fixed and variable costs.
Why Calculation in Excel (or here) Matters
The MHR is not just about the purchase price of the machine. It is a composite figure that must recover the cost of the equipment, the space it occupies, the electricity it consumes, the maintenance it requires, and the operator who runs it.
Key Formulas Used
To accurately determine your hourly rate, we aggregate the following components:
1. Depreciation Cost
This distributes the machine's net cost over its useful life.
Depreciation/Hr = (Purchase Cost - Salvage Value) / (Useful Life Years × Annual Hours)
2. Power Cost
CNC machines are energy-intensive. We calculate this based on the kilowatt rating and local utility rates.
Power/Hr = Power Consumption (kW) × Electricity Rate ($/kWh)
3. Space & Facility Cost
Your machine occupies floor space that costs money (rent, taxes, heating). This is often overlooked in simple calculations.
Space/Hr = (Floor Space sq.ft × Annual Rate per sq.ft) / Annual Hours
Example Calculation
Consider a VMC purchased for $80,000 with a 5-year life. It runs 2,000 hours a year.
| Component | Annual Cost | Hourly Cost |
|---|---|---|
| Depreciation | $16,000 | $8.00 |
| Space (200 sq.ft @ $10) | $2,000 | $1.00 |
| Power (10kW @ $0.15) | $3,000 (est) | $1.50 |
| Labor | $50,000 | $25.00 |
| Total MHR | – | $35.50 |
Using a standardized method for your CNC machine hour rate calculation ensures consistency across quotes and protects your profit margins.