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Equipment Break-Even Calculator

Stack your whole rig: machine, truck, and trailer. Add operator labor and business overhead. Get the one number every operator needs before quoting work: the hourly rate where you stop losing money.

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The math, shown transparently

No black box. This is the owning and operating cost method from USACE EP 1110-1-8, the schedule the U.S. Army Corps of Engineers has used to cost construction equipment for decades.

// Per asset (machine, truck, trailer)

ownership_per_hr = depreciation + cost_of_money + insurance

operating_per_hr = fuel + repairs_maintenance + wear_parts

// The rig earns as a unit

equipment_per_hr = sum of every asset

labor_per_hr = wage x (1 + burden_%)

overhead_per_hr = monthly_overhead / billable_hours

// The two numbers that matter

break_even = equipment + labor + overhead

recommended = break_even / (1 - margin_%)

Worked example: a real rig

$110,000 skid steer with mulcher head, $78,000 one-ton diesel, $18,500 gooseneck, $45/hr operator, $1,500/mo overhead, 120 billable hours a month:

machine (own + operate) = $99.70/hr

truck = $17.95/hr

trailer = $3.28/hr

operator ($45 x 1.30) = $58.50/hr

overhead ($1,500 / 120) = $12.50/hr

break-even = $191.94/hr

at 30% margin, charge = $274.20/hr

The machine alone looked like $100/hr. The real number was $192. That gap is where underpriced operators go broke while staying busy.

Utilization moves the number more than anything

Every fixed cost in this calculator gets divided by your billable hours. Bill 120 hours a month and a $1,500 overhead adds $12.50/hr. Bill 60 and it adds $25. The same math hits depreciation, interest, and insurance on every asset. Before raising your rate, check whether the honest fix is more billable hours.

Be honest about billable hours, too. A 40-hour week is not 40 productive hours. Between transport, quoting, maintenance, and weather, most owner-operators bill 100 to 140 hours a month. Plug in the real number, not the hopeful one.

Frequently asked questions

What is a break-even rate for forestry mulching equipment?

Your break-even rate is the hourly price where every cost is covered and profit is zero. It includes ownership costs (depreciation, interest, insurance), operating costs (fuel, repairs, teeth), operator labor with payroll burden, and a share of business overhead. A typical skid steer rig with truck and trailer breaks even between $150 and $220 per productive hour. Anything you charge below that number loses money.

Why include the truck and trailer, not just the mulcher?

Because they cost money every hour the business runs. A $78,000 one-ton diesel and a $18,500 gooseneck add roughly $15 to $25 per productive hour in depreciation, interest, insurance, and upkeep. Operators who only cost the machine quietly donate that money on every job. The rig earns as a unit, so price it as a unit.

What counts as business overhead?

Everything you pay to exist that is not tied to one machine: shop rent, office costs, phones, software, bookkeeping, marketing, and general liability insurance. Add it up monthly and divide by your billable hours. At $1,500 a month over 120 billable hours, overhead adds $12.50 to every hour you sell.

How is this different from what the market charges?

Market rates tell you what other people charge. Your break-even tells you what you can afford to charge. If the going rate in your area is below your break-even, you now know that with certainty, and you can fix utilization, costs, or your market instead of guessing. Most operators who know their number stop competing on price.

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