function calculateEquipmentRate() {
// Get Inputs
var acquisition = parseFloat(document.getElementById('eqAcquisition').value);
var salvage = parseFloat(document.getElementById('eqSalvage').value);
var lifeYears = parseFloat(document.getElementById('eqLife').value);
var annualHours = parseFloat(document.getElementById('eqAnnualHours').value);
var overheadPct = parseFloat(document.getElementById('eqOverhead').value);
var fuelPrice = parseFloat(document.getElementById('eqFuelPrice').value);
var fuelBurn = parseFloat(document.getElementById('eqFuelBurn').value);
var maintCost = parseFloat(document.getElementById('eqMaint').value);
var operatorWage = parseFloat(document.getElementById('eqOperator').value);
// Validation
if (isNaN(acquisition) || isNaN(lifeYears) || isNaN(annualHours)) {
alert("Please enter valid numbers for Acquisition Cost, Useful Life, and Annual Hours.");
return;
}
// Default 0 for optional fields if empty
if (isNaN(salvage)) salvage = 0;
if (isNaN(overheadPct)) overheadPct = 0;
if (isNaN(fuelPrice)) fuelPrice = 0;
if (isNaN(fuelBurn)) fuelBurn = 0;
if (isNaN(maintCost)) maintCost = 0;
if (isNaN(operatorWage)) operatorWage = 0;
// 1. Calculate Ownership Costs
// Depreciation per hour = (Acquisition – Salvage) / (Life Years * Annual Hours)
var totalLifeHours = lifeYears * annualHours;
var depreciationTotal = acquisition – salvage;
var depreciationHourly = 0;
if (totalLifeHours > 0) {
depreciationHourly = depreciationTotal / totalLifeHours;
}
// Average Annual Investment (AAI) for calculating Interest/Insurance/Taxes
// AAI = (Initial Cost + Salvage) / 2 is a standard approximation
var averageInvestment = (acquisition + salvage) / 2;
var annualOverheadCost = averageInvestment * (overheadPct / 100);
var overheadHourly = 0;
if (annualHours > 0) {
overheadHourly = annualOverheadCost / annualHours;
}
var totalOwnershipHourly = depreciationHourly + overheadHourly;
// 2. Calculate Operating Costs
var fuelHourly = fuelPrice * fuelBurn;
var totalOperatingHourly = fuelHourly + maintCost;
// 3. Totals
var totalMachineRate = totalOwnershipHourly + totalOperatingHourly;
var totalRate = totalMachineRate + operatorWage;
// Display Results
document.getElementById('resDepreciation').innerHTML = '$' + depreciationHourly.toFixed(2) + ' / hr';
document.getElementById('resOverhead').innerHTML = '$' + overheadHourly.toFixed(2) + ' / hr';
document.getElementById('resOwnership').innerHTML = '$' + totalOwnershipHourly.toFixed(2) + ' / hr';
document.getElementById('resFuel').innerHTML = '$' + fuelHourly.toFixed(2) + ' / hr';
document.getElementById('resMaint').innerHTML = '$' + maintCost.toFixed(2) + ' / hr';
document.getElementById('resOperating').innerHTML = '$' + totalOperatingHourly.toFixed(2) + ' / hr';
document.getElementById('resOperator').innerHTML = '$' + operatorWage.toFixed(2) + ' / hr';
document.getElementById('resTotal').innerHTML = '$' + totalRate.toFixed(2) + ' / hr';
document.getElementById('ercResult').style.display = 'block';
}
Understanding Equipment Rates
Calculating the correct equipment rate is vital for construction estimators, fleet managers, and contractors. A precise hourly rate ensures that you are recovering both the cost of owning the machine and the cost of operating it, protecting your profit margins on every job.
Ownership Costs (Fixed Costs)
Ownership costs occur regardless of whether the equipment is working. These are often referred to as fixed costs.
Depreciation: The decline in value of the asset over time due to wear and obsolescence. This calculator uses the straight-line method based on purchase price, salvage value, and useful life.
Insurance & Taxes: Calculated based on the average annual value of the investment. This covers property taxes, insurance premiums, and storage costs.
Operating Costs (Variable Costs)
Operating costs are incurred only when the machine is running. These are highly variable and depend on job site conditions.
Fuel: Often the largest variable expense. It is calculated by multiplying the fuel price by the hourly consumption rate.
Maintenance & Repairs: Includes preventive maintenance (oil, filters) and major repairs (tracks, tires, hydraulics). This is usually estimated as an hourly dollar amount.
Wearables: Items like bucket teeth, blades, and tires that wear out faster than the machine's life.
How to Use This Equipment Rate Calculator
To get the most accurate hourly charge rate:
Determine Acquisition Cost: Include the base price plus sales tax, delivery, and initial setup fees.
Estimate Usage: Be realistic about annual billable hours. Overestimating hours will result in a rate that is too low to cover costs.
Check Fuel Prices: Use a realistic average fuel price for the duration of the project, not just today's spot price.
Include Operator Wages: If you are billing for a "manned" machine, ensure the operator wage includes burden (benefits, payroll taxes, workers comp).