Which element is usually the largest?

Labor and ownership dominate most machining rates. A two-shift cell spreads ownership across more spindle hours, so the ownership element per hour falls as utilization rises.

What belongs in shop overhead?

Power, lighting, compressed air, floor space, and other indirect costs. It is the overhead the machine hour consumes, not the whole plant's fixed cost.

Why compare cost with the charged rate?

The charged rate must recover cost before it earns anything. The margin shows that recovery, and a negative margin means every billed hour loses money against its own burden.

Is depreciation the same as ownership cost?

Depreciation is the write-down of the machine over its useful life. The ownership element can add insurance, taxes, and the cost of capital on top.

CNC Machining calculator

CNC Machine Hour Cost Calculator

Add the four cost elements behind a machine hour and test them against the rate you charge. The margin shows whether an hour recovers its own cost.

What this calculator does

Build the CNC machine-hour cost from ownership, labor, overhead, and maintenance elements, then compare it with your charged rate.

Formula used

Machine-hour cost = ownership and depreciation + operator labor and supervision + shop overhead + maintenance
Rate margin = charged machine rate − machine-hour cost

Inputs explained

Ownership and Depreciation: Machine purchase and depreciation charge for each spindle hour.
Operator Labor and Supervision: Loaded labor and supervision for each machine hour.
Shop Overhead, Energy, and Floor Space: Overhead, power, and floor space charged per machine hour.
Maintenance, Tooling Support, and Software: Maintenance, tooling support, and software cost per hour.
Charged Machine Rate: Rate you charge or budget for this machine hour.

How to use the result

Best suited to building a machine rate from elements, checking a charged rate for margin, comparing two machines on hourly cost.
A single rate hides differences between job types and setups. Idle hours still carry ownership and overhead even when uncharged.

Current U.S. benchmarks

As of Sep 2026, average hourly earnings in U.S. manufacturing are $30.21 (BLS), up 3.4% from a year earlier. Burdened shop rates typically run 1.3 to 1.8 times earnings once benefits and overhead are loaded.
The producer price index for steel mill products stands at 381.162 (BLS, Aug 2026), up 23.4% from a year earlier. Quotes priced off last quarter's material cost miss this move.
The U.S. has 17,154 machine shops establishments employing about 223,303 workers (Census County Business Patterns, 2023).

Common questions

Which element is usually the largest? Labor and ownership dominate most machining rates. A two-shift cell spreads ownership across more spindle hours, so the ownership element per hour falls as utilization rises.
What belongs in shop overhead? Power, lighting, compressed air, floor space, and other indirect costs. It is the overhead the machine hour consumes, not the whole plant's fixed cost.
Why compare cost with the charged rate? The charged rate must recover cost before it earns anything. The margin shows that recovery, and a negative margin means every billed hour loses money against its own burden.
Is depreciation the same as ownership cost? Depreciation is the write-down of the machine over its useful life. The ownership element can add insurance, taxes, and the cost of capital on top.

Related guides

Last reviewed 2026-10-02.