What is included in the hourly rate?

The hourly rate includes all costs of running your shop: equipment depreciation (spreading purchase cost over lifespan), direct labor with benefits, electricity consumption, annual maintenance, consumables (lenses, nozzles, wear parts), facility costs (rent, utilities, insurance), general overhead (admin, sales, management), and assist gas consumption. This comprehensive rate ensures you cover all expenses.

How accurate is this calculation?

This calculator applies straightforward formulas to the cost and utilization inputs you provide to estimate a shop hourly rate. The usefulness of the result depends on how representative your inputs are for your shop. Treat defaults as placeholders, replace them with your own current costs, and update the numbers when wages, energy, rent, or production volume change.

How often should I update my hourly rate?

Review and update your hourly rate quarterly at minimum, or immediately after major changes: new equipment purchases, significant wage adjustments, facility cost changes, utility rate increases, or changes in production volume. Many shops review monthly to ensure pricing remains competitive and profitable.

What is the break-even utilization rate?

In this tool, break-even utilization is an estimate of the minimum machine hours per year needed to cover the fixed and variable costs you entered. Running well below that level may indicate that your modeled costs are not being recovered. Use the result as a planning reference and choose utilization targets that reflect your actual backlog, staffing, and capacity strategy.

How do I compare my rate to industry benchmarks?

There is no single “correct” hourly rate for every shop. Rather than relying on generic benchmark ranges, compare your modeled rate with your own historical quotes, win/loss data, and the rates you see in your specific market. The positioning information in this tool is only a rough guide and should be validated against your actual customers, competitors, and value-added services.

Should I include profit margin in the hourly rate?

This calculator focuses on estimating your break-even cost. Profit margin is typically added separately when quoting and should reflect job complexity, customer relationship, competition, and risk. Many shops test a range of margin levels in their quoting process rather than relying on a single fixed percentage. Treat the hourly rate here as a cost baseline, not a final selling price.

How does equipment utilization affect my costs?

When fixed expenses like depreciation, facility, and overhead are a large share of your cost, increasing the number of billable hours tends to reduce the cost per hour. For example, if you spread $50k/year in fixed costs over 1000 hours versus 2000 hours, the resulting cost per hour is very different. Use this calculator to model different annual working hours and see how sensitive your own hourly rate is to utilization.

Shop Hourly Rate Builder

Estimate a shop hourly rate with transparent cost breakdown.

Cost Baseline: Results show break-even hourly cost. Add profit margin when quoting based on your market and risk. Compare with your accounting data.

Input Parameters

Equipment

Equipment Cost (USD)*

Initial purchase price of laser system

Lifespan (years)*

Expected useful life of equipment

Annual Working Hours*

Expected billable hours per year

Labor & Energy

Operator Rate (USD/hr)*

Benefits Multiplier*

Total Power (kW)*

Electricity Rate (USD/kWh)*

Maintenance & Consumables

Annual Maintenance (% of equipment)*

Consumables (USD/hr)*

Facility & Overhead

Rent (USD/month)*

Utilities (USD/month)*

Insurance (USD/month)*

Overhead (USD/month)*

Assist Gas

Gas Type*

Choose based on material and quality needs

Consumption (m^3/hr)*

Average gas flow rate

Gas Price (USD/m^3)*

Local gas supplier cost

Ready to Calculate

Fill in your shop parameters and click Calculate to see the hourly rate

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