Guide
Construction equipment cost per hour: how to work it out
Updated 23.10.2026
The cost per hour of a construction machine is its owning costs (depreciation, interest, insurance) plus its operating costs (fuel, maintenance, repairs, wear parts), divided by the hours it actually works. Add the cost of downtime and you can see which machines earn their keep and which ones drain money. Below: the method, a worked example for a mini excavator and the signs that it is time to replace a machine.
How do you calculate construction equipment cost per hour?
The formula fits on one line: cost per hour = (annual owning costs + annual operating costs) ÷ hours worked in the year. The hard part is reliable figures.
Owning costs arrive whether the machine works or sits in the yard. Operating costs only appear when it runs. Keeping them apart shows the effect of utilisation straight away: an excavator that works few hours is expensive per hour, even if it never breaks down.
The operator’s wage is usually handled separately, because it belongs to the person, not the machine. If you need a hire rate with operator, add the wage and your overheads at the end.
In Switzerland, the Swiss Contractors’ Association (Schweizerischer Baumeisterverband, SBV) publishes inventory data for construction plant every year, including internal charge-out rates. They follow the same logic: fixed costs (depreciation, interest, insurance, yard costs) and variable costs (repairs and overhauls, energy, lubricants). They are a useful benchmark, but they do not replace the figures from your own fleet.
Owning costs: depreciation, interest, insurance
These are the fixed costs of a machine. Work them out per year, then spread them over the working hours.
- Depreciation: (purchase price − estimated resale value) ÷ years of use. Base the resale value on real adverts or your dealer’s view, not on hope.
- Interest: even if you paid cash, that money is tied up in the machine. A common method uses the average capital: (purchase price + resale value) ÷ 2, multiplied by an annual interest rate.
- Insurance, road tax and registration: annual premiums and fees, plus periodic inspections for registered machines.
- Yard and storage: space in the yard, sheds, a share of the workshop.
Operating costs: fuel, maintenance, repairs, tyres and tracks
These costs rise with the hours. They are the least known, because they arrive as small invoices all year.
Labour in your own workshop is a real cost. A fitter who spends a day on a dumper is a paid day. Record workshop hours at an internal rate, or your plant will look cheaper than it is.
- Fuel: litres per hour × price per litre. Telematics or fuel records give the real figure.
- Maintenance: scheduled services, oils, filters, greasing, inspections. Parts and labour from the workshop, in-house or external.
- Repairs: breakdowns, damage, rebuilds. They increase with the machine’s age and hours.
- Wear parts: tyres, tracks, bucket teeth, cutting edges, hoses. Divide the price of a set by its life in hours.
Downtime: the cost people forget
A broken machine costs more than its repair. The site waits, the crew is underused, you hire in a replacement or lose a chargeable day. For a hire company, each day off hire is lost revenue.
So for every breakdown, note how long the machine was out of action and what it cost: replacement hire, transport, lost hours. Added up over the year, this figure often changes the ranking of your machines. An old access platform that looks cheap can become the costliest unit in the fleet.
Worked example: mini excavator cost per hour, step by step
The figures below are invented and rounded. They show the calculation, not a reference rate.
A 3.5-tonne mini excavator bought for CHF 60,000, kept for 6 years, sold for about CHF 18,000, working 800 hours a year.
- Depreciation: (60,000 − 18,000) ÷ 6 = CHF 7,000 a year.
- Interest: (60,000 + 18,000) ÷ 2 = CHF 39,000 average capital, × 4% = CHF 1,560 a year.
- Insurance and tax: CHF 1,200 a year.
- Owning costs: 7,000 + 1,560 + 1,200 = CHF 9,760 a year, so 9,760 ÷ 800 = CHF 12.20 per hour.
- Fuel: 4 litres per hour × CHF 2.00 = CHF 8.00 per hour.
- Maintenance (parts and labour): CHF 2,400 a year ÷ 800 h = CHF 3.00 per hour.
- Repairs: CHF 3,200 a year ÷ 800 h = CHF 4.00 per hour.
- Tracks: a CHF 2,400 set lasting 2,000 h = CHF 1.20 per hour.
- Operating costs: 8.00 + 3.00 + 4.00 + 1.20 = CHF 16.20 per hour.
- Machine total, without operator: 12.20 + 16.20 = CHF 28.40 per hour.
Why most contractors do not know their machine costs
The example still needs downtime: 6 days of breakdown in the year, covered by hiring in at CHF 400 a day, so CHF 2,400. Spread over 800 hours, that adds CHF 3.00 per hour, and the real cost rises to CHF 31.40 per hour. If the same mini excavator only works 500 hours a year, its owning costs climb from CHF 12.20 to CHF 19.52 per hour (9,760 ÷ 500). An underused machine often costs more than one that breaks down now and then.
Few firms have these figures. The problem is not the formula, it is the data. Parts invoices go to the office, workshop hours sit on paper job sheets, the hour meter is only read at service time, and breakdowns are sorted out over the phone. The accounts know the company’s total repair bill, rarely the total per machine. And almost never the days of downtime. The result: firms keep machines that cost more than they earn, and charge out others below their real cost.
Godet fixes this at the source. Every entry in the maintenance log (service, repair, part) carries the date, the hour meter reading, parts and labour costs, and downtime. The hour meter is entered by hand or read from a photo by the AI, and the person checks the value. Costs for the last 12 months are shown month by month for each machine, and the Excel export gives you the figures to work out the hourly rate alongside your owning costs.
Godet is not an accounting package. It keeps maintenance and repair costs where they are useful: on the machine’s record. Try the 3D demo, no account needed, or read how to set up a construction equipment maintenance log.
When should you replace a construction machine?
A new machine is expensive to own and cheap to repair. An old one is the reverse. The right moment is usually where the average total cost per hour, counted from purchase, stops falling and starts to rise again. You only see it if you track costs machine by machine over several years.
When you sell, a complete log printed to PDF reassures the buyer. Sticking to the manufacturer’s service intervals also helps protect resale value.
- Repair costs per hour rise from year to year while working hours stay steady.
- Days of downtime pile up and disrupt site planning.
- A major repair (engine, transmission, hydraulics) approaches the machine’s resale value.
- Parts become hard to find or lead times get longer.
- The machine no longer fits: emissions rules on some sites, or what your clients require.
Frequently asked questions
What is the hourly cost of a mini excavator?
It depends on purchase price, hours per year, fuel and the machine’s condition. In the invented example above, it comes to about CHF 28 per hour without operator and CHF 31 with downtime. Your own figures may be very different: only your history gives the true value.
Should the operator’s wage be included in the cost per hour?
To compare machines with each other, no: keep the machine cost on its own. For a hire rate with operator, add the operator’s wage with on-costs and your overheads.
How long should you keep a construction machine?
There is no single answer. It depends on the type of machine, the hours per year and working conditions. Track the average total cost per hour: when it climbs clearly, it is time to look at replacing it.
How much does cost tracking with Godet cost?
There is a free 15-day trial, no credit card needed. After that, Essentiel is CHF 29 a month for up to 5 machines, Pro CHF 59 for up to 20 and Parc CHF 99 for up to 50, with no commitment. Details are in the help section.