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🚜 Machinery Cost Calculator — Cost per Hour

Calculate the true cost per hour of owning and operating farm machinery. Includes depreciation, fuel, repairs, insurance, interest and labour. Compare ownership vs contracting.

Quick answer: A $300,000 tractor used 500 hours/year over 12 years: Depreciation $50/hour + fuel $30-50/hour + repairs $25/hour + other = $120-150/hour all-in.

🚜 Calculate Machinery Cost per Hour

New or purchase price including GST (if not claiming)
Tractors 10-15, Harvesters 10-12, Implements 15-20
Tractor 500-800, Harvester 300-500, Sprayer 400-600
Fuel + oil + filters + repairs + regular servicing
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Total Cost per Hour
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Fixed Cost per Hour
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Variable Cost per Hour

📐 How Machinery Cost Is Calculated

Depreciation per hour = (Purchase Price − Salvage Value) ÷ (Years × Hours/Year)
Fixed cost = Depreciation + Interest + Insurance + Shedding
Variable cost = Fuel + Repairs + Maintenance + Labour
Total = Fixed + Variable
  1. Calculate annual depreciation — purchase price minus salvage divided by years
  2. Add other fixed costs — interest (5-8% of average value), insurance (1-2%), shedding (0.5%)
  3. Add variable costs — fuel, repairs, maintenance, labour
  4. Divide by annual hours — to get cost per operating hour

📊 Worked Example

A $300,000 tractor used 500 hours/year for 12 years. Salvage $60,000 (20%). Annual variable costs $25,000.

Annual depreciation = ($300,000 − $60,000) ÷ 12 = $20,000/year
Depreciation per hour = $20,000 ÷ 500 = $40/hour
Fixed costs per hour = $40 + $8 (interest) + $4 (insurance) = $52/hour
Variable cost per hour = $25,000 ÷ 500 = $50/hour
Total cost per hour = $102/hour

Contractor rate for similar work is $120/hour — ownership is cheaper. At 300 hours/year, cost rises to $140/hour — better to contract.

❓ Frequently Asked Questions

Total cost per hour = Fixed costs (depreciation + interest + insurance + shedding) + Variable costs (fuel + repairs + maintenance + labour).

Tractor 150-250hp: $80-150/hour, Harvester: $200-400/hour, Seeder: $50-100/hour, Sprayer: $40-80/hour.

A 200hp tractor at 75% load uses ~30 L/h. At $1.80/L = $54/hour. Heavy tillage at full load: 40 L/h = $72/hour.

Compare your cost per hour to contractor rates. If your cost is higher, contract. If lower, own. For high-hour items (500+ hours/year), ownership is often cheaper.

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