Builds a contractor-owned plant item's hourly £/hr rate from first principles: depreciation, finance on average capital employed, insurance and maintenance spread over productive hours, plus fuel and an optional operator.
Tender-stage indicative only: Designing Buildings Wiki / Machine Hour Rate method, CPA idle-time convention.
For estimating guidance only: not a substitute for current CPA/Spon's published plant rates or your own cost records.
About this plant rate build-up calculator
This free plant rate build-up calculator turns the capital cost of a contractor-owned plant item into an hourly £/hr charge-out rate, built from first principles rather than a hire-book figure. It is aimed at estimators, quantity surveyors and plant managers pricing owned excavators, dumpers, compressors and similar equipment at tender stage, or sense-checking a hire rate against the true cost of ownership. Enter the capital and residual values, working life, ownership percentages, fuel and utilisation, and it returns the machine rate, an optional all-in (with-operator) rate and a utilisation sensitivity table. Everything runs in your browser. Nothing is uploaded.
How the plant rate is calculated
The Machine Hour Rate method (Designing Buildings Wiki unit-rate estimating) spreads a fixed annual cost over productive hours and adds fuel. Annual fixed cost = depreciation ((capital − residual) ÷ life) + finance (average capital employed × finance%) + insurance (capital × insurance%) + maintenance (capital × maintenance%), where average capital employed is (capital + residual) ÷ 2. Productive hours = annual working hours × utilisation%, so the machine rate is (annual fixed cost ÷ productive hours) + (fuel l/hr × £/l). An optional operator is added at full rate for the CPA “all-in” rate, and the idle machine rate is ⅔ of the working machine rate per the CPA Model Conditions for the Hiring of Plant, Clause 25 (the operator stays at full rate when the machine is idle).
Frequently asked questions
Why is finance charged on the average capital employed?
Because the capital tied up in the machine falls over its life as it depreciates towards its residual value. Charging finance on the mean of the capital and residual values, (capital + residual) ÷ 2, approximates the average outstanding balance over the whole life, which is the standard Machine Hour Rate convention rather than charging the full purchase price every year.
What does the utilisation figure do?
Utilisation is the share of scheduled working hours the machine is actually productive. The fixed annual cost is recovered only over those productive hours, so a lower utilisation raises the hourly rate. The calculator also reports the rate at a fixed 50/70/90% so you can see how sensitive the figure is to keeping the plant busy.
Why is the idle rate two-thirds of the working rate?
The CPA Model Conditions for the Hiring of Plant, Clause 25, set idle-time hire at two-thirds of the working machine rate, on the basis that fuel stops but ownership costs continue. An included operator, however, is charged at their full rate even when the machine stands idle. The tool is a tender-stage estimate. Verify against current CPA or Spon’s published rates and your own cost records.