Machine Shop Rate Calculator

Inputs

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Direct hourly wage for the operator or machinist before payroll taxes, benefits and burden.
$/hr
Payroll taxes, benefits, paid time, insurance or other wage burden as a percentage of direct wage.
%
Monthly lease, loan, depreciation, service contract, tooling financed with the machine or allocated equipment cost.
$/mo
Rent, utilities, insurance, power, software, shop supplies and other monthly facility costs allocated to this rate.
$/mo
Estimating, bookkeeping, owner/admin time, sales, accounting, phone, internet and general overhead allocated to this rate.
$/mo
Average monthly inserts, cutters, coolant, maintenance, calibration, small repairs and consumables not charged directly to a job.
$/mo
Calendar working hours before utilization. A 40 hour/week month is about 173.3 hours.
hr/mo
Percent of available hours that are actually billable. Non-billable quoting, setup development, idle time, maintenance and rework reduce this.
%
Gross margin on quoted revenue. This is not cost-plus markup: rate = breakeven / (1 - margin).
%

Results

Default result
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Quoted shop rate
158.13$/hr
Pass

breakeven rate divided by 1 - 20.0% target margin

Also computed

Breakeven rate126.51$/hr

Loaded labor cost41.60$/hr

Overhead cost84.91$/hr

Billable hours121.3hr/mo

Monthly overhead10,300$/mo

Profit per billable hour31.63$/hr

Method notes 4 notes
  • Monthly overhead is $10300 spread across 121.3 billable hours.
  • Breakeven rate = $41.60/hr loaded labor + $84.91/hr overhead.
  • A 20.0% gross margin means rate = breakeven / (1 - margin), not breakeven x (1 + margin).
  • Use the quoted shop rate in the machining cost calculator as the machine-rate input, then add job-specific material, setup, tooling and secondary work.

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