Hourly cost support layer

Laser Cutting Cost Per Hour & Machine Hourly Rate Formula

Use this cost floor support page to build a defensible laser shop hourly rate from depreciation, labor, power, assist gas, maintenance, consumables, facility cost, and overhead. This is the operating-cost model behind fiber laser cutting machine operating costs per hour, fiber laser operating cost per hour, and hourly cost per part.

Direct answer

Laser cutting cost per hour = machine depreciation + loaded labor + electricity + assist gas + planned maintenance + consumables + facility allocation + overhead. Use your own annual productive hours and utilization rate to define the machine cost floor, then add margin only after the internal machine hourly rate is clear.

Support handoff: owns the cost floor input, feeds the hourly-rate calculator, and returns to the laser quote packet.

Quick quote intake

Build the cost floor before quoting

This support page owns the shop hourly rate input that later flows into laser quote, nesting, overhead, and export workflows.

Material

Not priced here

Thickness

Used later by quote tool

Cut length

Used later by quote tool

Shop rate

Primary output

Target margin

Apply after cost floor

Export/report

Send rate into worksheet

Quote packet status

Inputs, assumptions, and export readiness

Cost floor

ready

Owned by this page

Quote handoff

review

Laser calculator next

Evidence

review

Accounting data required

Result preview

Result preview

Depreciation and machine cost
Hourly cost block
Labor, power, gas, maintenance
Operating block
Facility and overhead
Allocation block

Estimated quote

Cost floor first

Margin belongs after the internal machine hourly rate is visible.

Assumption checklist

  • Use accounting policy, productive hours, payroll burden, utility bills, and maintenance records.
  • Keep setup time visible so small runs do not hide cost inside a generic hourly rate.
  • Send the finished cost floor into laser quote and overhead tools before export.

Reference data governance

Last reviewed: 2026-04-27. Hourly-rate defaults are cost-accounting assumptions for depreciation, loaded labor, power, gas, maintenance, facility, and overhead. Replace them with shop accounting data.

For maintenance and service contract categories, collect planned service, optics, nozzles, filters, emergency repair allowance, downtime records, and contract scope as inputs. Do not treat generic service prices as a quote-ready benchmark.

Review methodology and assumptions

Quick Summary

Total Hourly Shop Rate = Equipment + Labor + Energy + Maintenance + Consumables + Facility + Overhead

This guide intentionally treats example numbers as planning placeholders, not universal rates. Replace every default with your shop invoices, payroll data, utility rate, maintenance records, and actual productive machine hours before quoting.

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

Depreciation per Hour = Total Equipment Cost ÷ Expected Lifetime Hours

Inputs to Collect

Installed machine cost

Use the invoice-backed machine, installation, commissioning, training, and software cost you actually capitalized.

Useful-life policy

Match your accounting policy or internal replacement plan instead of copying a generic lifetime-hour number.

Productive machine hours

Separate calendar availability from actual cutting, setup, maintenance, and idle time.

Financing or lease treatment

Decide whether financing cost belongs in depreciation, overhead, or a separate cash-flow line.

Pro tip: Keep depreciation conservative and review it when utilization, maintenance history, financing terms, or the planned replacement date changes.

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

Labor per Hour = (Annual Compensation ÷ Productive Hours) × Labor Burden Multiplier
Use your own labor burden multiplier so benefits, taxes, paid time, and shift premiums stay visible.

Labor Inputs to Collect

Payroll-backed operator cost

Start from actual wages or salary, then add taxes, benefits, paid time, and shift premiums.

Operator allocation per machine

A single operator may cover one machine, several machines, or only part of the run depending on automation and supervision.

Programming and supervision policy

Decide whether programming, lead-operator review, and production management are direct labor, setup cost, or overhead.

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 wall-power draw from the machine spec or measured logs
  • Chiller/cooling system load
  • Dust collection and filtration load
  • CNC controller, motors, and auxiliaries
  • Facility HVAC allocated to machine space

Calculation Formula

Energy per Hour = Total Power (kW) × Load Factor × Electricity Rate ($/kWh)
Use measured load factor when available; otherwise keep the assumption visible.

Example Calculation

6kW Fiber Laser (12 kW wall power)12.0 kW
Chiller3.5 kW
Dust collector5.0 kW
Auxiliaries1.5 kW
Total Power22.0 kW
Average Load Factor0.70
Effective Power Draw15.4 kW
Electricity Rate$0.12/kWh
Cost per Hour$1.85/hr

Energy efficiency: Treat the machine specification as a starting point, then calculate cost from measured wall power, auxiliary loads, load factor, and your electricity tariff.

4. Maintenance & Consumables

Regular Maintenance Items

Protective lenses

Use supplier invoice cost and your actual replacement history.

Cutting nozzles

Track nozzle usage by material, pierce count, and cut-quality requirement.

Assist gas

Calculate from your gas contract, pressure settings, nozzle size, and measured consumption.

Scheduled maintenance

Allocate preventive maintenance, alignment checks, calibration, and spare parts across productive hours.

Convert It to an Hourly Cost

Maintenance and consumables per hour = annual planned maintenance + annual consumables spend ÷ productive machine hours

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

Overhead Rate = Annual Overhead Costs ÷ Total Annual Machine Hours

Floor Space Method

Overhead Rate = (Facility Costs × Machine Footprint %) ÷ Annual Hours

Percentage of Direct Labor

Overhead = Direct Labor Cost × Your Internal Overhead Rate

Overhead Review Checklist

Use the same time base

If annual overhead is divided by machine hours, use productive hours consistently across all machines.

Avoid double counting

Do not count utilities, supervision, maintenance, or financing twice across direct cost and overhead lines.

Reconcile to accounting totals

The modeled overhead pool should tie back to your actual facility and administrative cost records.

6. Total Hourly Shop Rate Example

Complete example for a 6kW fiber laser in a mid-sized shop:

Equipment Depreciation$4.50/hour
Direct Labor (0.5 operator allocation)$20.00/hour
Energy (electricity)$1.85/hour
Maintenance & Consumables$6.00/hour
Assist Gas (Nitrogen, moderate use)$3.50/hour
Facility & Overhead Allocation$18.00/hour
Total Shop Cost$53.85/hour
Profit Margin (30%)$16.16/hour
Customer Rate$70.00/hour

Quote check: Treat this as an illustrative model, not a published market rate. Your customer rate should first cover internal cost, then reflect margin, payment terms, job risk, and the local competitive context.

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. Compare Price Only After Cost Coverage

Market checks are useful after you know the internal cost floor. Do not lower a quote below cost just because a competitor appears cheaper.

Hourly Rate Questions

How do you calculate laser cutting cost per hour?

Add equipment depreciation, loaded labor, electricity, assist gas, maintenance, consumables, facility allocation, and overhead, then divide fixed annual costs by productive machine hours. Add margin only after the internal cost rate is clear.

What is the difference between machine hourly rate and customer price per hour?

Machine hourly rate is the internal cost to run the equipment. Customer price per hour adds margin, risk, payment terms, setup recovery, and market positioning on top of that internal cost.

How much is laser cutting per hour?

There is no universal hourly price. The defensible answer depends on your installed machine cost, utilization, operator allocation, local labor cost, electricity rate, assist gas, maintenance history, and overhead allocation.

Should setup time be included in the hourly shop rate?

Keep setup time visible instead of hiding it inside the hourly rate. Charge it separately or amortize it over the batch quantity so small runs do not look artificially cheap.

Can I use this formula in a spreadsheet?

Yes. Use the formula on this page for the hourly-rate model, then use the CSV worksheet to carry the hourly rate into material, cycle-time, pierce-time, gas, labor, and margin calculations.

Build the hourly rate, then price the part

Start with the machine hourly rate, then carry it into material, pierce time, assist gas, labor, overhead, and margin before sending a quote.