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?

The calculation is 100% mathematically accurate based on the inputs you provide. Accuracy of your final rate depends on using your actual local costs. Default values are industry averages only - you must replace them with your specific numbers. Update inputs quarterly or whenever costs change significantly (equipment purchase, wage increases, rent changes).

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?

Break-even utilization is the minimum machine hours per year needed to cover your fixed costs (equipment depreciation, facility, overhead). Running below this point means you lose money. Most shops target 60-80% utilization (1200-1600 hours/year) for healthy profitability. Higher utilization spreads fixed costs over more hours, reducing per-hour cost.

How do I compare my rate to industry benchmarks?

Industry benchmarks vary by region, equipment type, and capabilities. For laser cutting: Low range $40-60/hr (basic shops, high competition), Mid range $60-90/hr (most professional shops), High range $90-150+/hr (premium capabilities, specialized services). Consider your market, competition, and value-added services when positioning.

Should I include profit margin in the hourly rate?

This calculator shows your break-even cost. Add profit margin separately when quoting: 15-25% for standard work, 30-50% for complex or rush jobs, 50-100% for specialized services. Also consider: job complexity, customer relationship, market competition, and risk factors. Your hourly rate is the floor, not the ceiling.

How does equipment utilization affect my costs?

Higher utilization dramatically reduces your per-hour cost by spreading fixed expenses (depreciation, facility, overhead) over more billable hours. Example: $50k/year in fixed costs ÷ 1000 hours = $50/hr, but ÷ 2000 hours = $25/hr. This is why batching jobs and maintaining high utilization is crucial for profitability.

Shop Hourly Rate Builder

Calculate a complete, accurate hourly rate for your laser cutting operation with transparent cost breakdown and industry benchmarking.

How to Calculate Your True Hourly Cost

1Equipment Costs: Enter your laser system cost, expected lifespan, and annual operating hours to calculate depreciation
2Operating Expenses: Input labor rates with benefits, electricity costs, maintenance, and consumables
3Facility & Overhead: Include rent, utilities, insurance, and general overhead (admin, sales, management)
4Review Results: Analyze cost breakdown, check benchmark position, and identify optimization opportunities

💡 Pro Tip: This calculator shows your break-even cost. Add 20-50% profit margin when quoting to customers. Your hourly rate is the minimum you must charge to stay in business.

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 (m³/hr)*

Average gas flow rate

Gas Price (USD/m³)*

Local gas supplier cost

Ready to Calculate

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

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