Laser Hourly Cost Structure: Complete Reference
Master the fundamentals of hourly shop rate calculation for laser cutting operations. This comprehensive guide breaks down every cost component with industry benchmarks, formulas, and real-world examples.
Quick Summary
Total Hourly Shop Rate = Equipment + Labor + Energy + Maintenance + Consumables + Facility + Overhead
Industry benchmarks: $45-85/hour for 1-3kW fiber lasers, $85-150/hour for 6-12kW systems. Actual rates depend on location, utilization, and business model.
1. Equipment Depreciation
What It Includes
- Laser cutting machine purchase price
- Installation and commissioning costs
- Initial training and setup
- Software licenses (CAD/CAM, nesting)
Calculation Formula
Industry Benchmarks
| Laser Type | Purchase Price | Lifetime Hours | $/Hour |
|---|---|---|---|
| 1-3kW Fiber | $120,000 - $180,000 | 50,000 - 60,000 | $2.00 - $3.60 |
| 4-6kW Fiber | $200,000 - $300,000 | 50,000 - 60,000 | $3.33 - $6.00 |
| 8-12kW Fiber | $350,000 - $500,000 | 50,000 - 60,000 | $5.83 - $10.00 |
| CO2 4-6kW | $250,000 - $350,000 | 30,000 - 40,000 | $6.25 - $11.67 |
Pro Tip: Use conservative lifetime hour estimates. High-power lasers may require major resonator rebuilds at 30,000-40,000 hours. Factor this into depreciation.
2. Direct Labor Cost
Components
- Operator base wages
- Health insurance and benefits (20-30% of wages)
- Payroll taxes (7-10% of wages)
- Paid time off, holidays, sick leave
- Training and skill development
Calculation Formula
Typical multiplier: 1.35-1.50 (includes benefits, taxes, overhead)
Wage Benchmarks (USA, 2025)
Note: Highly automated shops with lights-out operations may allocate only 0.2-0.5 operators per machine, significantly reducing per-hour labor cost.
3. Energy Cost
Power Consumption Components
- Laser source power draw (wall plug efficiency: 25-45%)
- Chiller/cooling system (2-5 kW continuous)
- Dust collection and filtration (3-7 kW)
- CNC controller, motors, auxiliaries (1-2 kW)
- Facility HVAC allocated to machine space
Calculation Formula
Load Factor typically 0.6-0.85 for active cutting
Example Calculation
Energy Efficiency: Modern fiber lasers are 3-5x more energy efficient than CO2 lasers per watt of output, resulting in 40-60% lower electricity costs.
4. Maintenance & Consumables
Regular Maintenance Items
Replace every 200-800 hours depending on material and cleanliness
Replace every 40-200 pierces (varies by material thickness)
Consumption: 0.5-5 m³/hour depending on pressure and nozzle
PM service, alignment checks, calibration, spare parts
Estimated Hourly Cost Range
Low-intensity use (thin materials, oxygen assist)
$2-5/hour
Heavy-duty use (thick steel, nitrogen assist)
$8-20/hour
5. Facility & Overhead Allocation
Overhead Categories
- Facility: Rent/mortgage, property tax, building insurance, utilities (HVAC, lighting)
- Administration: Management salaries, accounting, IT, office supplies
- Sales & Marketing: Salespeople, advertising, website, customer acquisition
- Quality & Logistics: Inspection equipment, forklifts, material handling, shipping
- Insurance: General liability, equipment insurance, workers compensation
Allocation Methods
Machine Hour Method (Most Common)
Floor Space Method
Percentage of Direct Labor
Typical Overhead Rates
6. Total Hourly Shop Rate Example
Complete example for a 6kW fiber laser in a mid-sized shop:
Reality Check: Industry rates for 6kW fiber lasers typically range $60-95/hour depending on region, specialization, and competitive landscape. Ensure your calculated rate is market-competitive while covering all costs.
Best Practices
1. Review Rates Quarterly
Energy costs, wages, and material prices fluctuate. Update your rate calculation every 3-6 months to maintain profitability.
2. Track Actual vs. Estimated
Monitor real consumable usage, maintenance costs, and actual productive hours. Adjust estimates based on historical data.
3. Separate Setup from Run Time
Charge setup time separately or amortize over batch quantity. Don't hide setup costs in the hourly rate.
4. Consider Utilization Rate
Fixed costs (depreciation, facility) must be recovered over actual productive hours. A machine running 60% vs 90% capacity has different cost structures.
5. Benchmark Against Market
Compare your rates to local competitors and industry surveys. Being too high loses business; too low leaves money on the table.
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