Knowing how much each hour of a backhoe costs you is the foundation for quoting a job correctly, deciding whether to rent or buy, and spotting a machine that no longer pays for itself before it’s too late. Here’s how to calculate it. It works the same way for an excavator, a loader or a truck.
The idea in one line
Hourly cost = what it costs to own the machine + what it costs to put it to work, divided by the hours it actually works.
1. Loss of value (depreciation)
A machine is worth less every year. To spread that loss per hour:
(Purchase price − Resale value) ÷ Useful life in hours
Use the hours you really expect to work it, not the ones in the catalog.
2. Fixed costs for the year
These are the costs you pay even when the machine is idle: insurance, taxes, permits, parking. Add them up and divide them by the hours it works in the year:
Fixed costs for the year ÷ Hours worked in the year
3. Fuel
It’s almost always the biggest cost and the one that slips away the most:
Gallons per hour × Price per gallon
The key figure is the real efficiency (gallons per hour) of that machine, not the brand average. If you don’t measure it, this number will be an assumption.
4. Maintenance and repairs
Oils, filters, tires, spare parts and shop labor. Add up the year’s total and divide it by the hours worked:
Maintenance and repairs for the year ÷ Hours worked in the year
5. The operator
What you pay the operator per hour (including statutory charges)
Add it all up
Hourly cost = depreciation + fixed costs + fuel + maintenance + operator
The most common mistakes
- Using assumed hours. If your hour meter readings aren’t up to date, the calculation is useless.
- Forgetting idle days. A machine that works few hours spreads its fixed costs over fewer hours: each hour costs more.
- Calculating it once and forgetting about it. Fuel prices, repairs and hours change every month.
Do it in a minute
Use our hourly cost calculator with your machine’s numbers.
In MACHVERSE this calculation happens automatically: each machine’s hour meter, fuel refills, spare parts and maintenance are recorded day to day, and you see the real cost per machine without doing the math.