A machine's hourly cost has three parts. Labour is already an hourly number — your operator's fully loaded wage. Depreciation and overhead are annual numbers that need to be spread across the hours the machine actually runs to become hourly figures of their own.
Overhead/hr = annual overhead ÷ productive hours/yr
Hourly cost = labour rate + depreciation/hr + overhead/hr
This depreciation method — straight-line, cost minus salvage value divided by useful life — is the standard approach used across CNC shop-costing guides and machine-rate calculators, not something specific to Ryxen.
An $85,000 CNC router, expected to run 10 years with a $5,000 resale value at the end, running 1,800 productive hours a year, with $8,000/year in allocated overhead and a $32/hr loaded operator rate.
- HOURSProductive hours is the number most shops get wrong first — clocked hours aren't cutting hours once changeovers, maintenance and gaps between jobs are accounted for.
- RATELabour rate should be fully loaded — wages plus benefits, WCB/WSIB, and other burden — not just the number on the pay stub.
- LIFEUseful life is an assumption. A conservatively short life inflates the hourly rate; an optimistic one understates it. Pick a number you can defend.
- SHAREDIf overhead is split across multiple machines, use a consistent allocation method for all of them — floor space or revenue share, not whichever number is convenient.
- MARGINThis is cost, not price. Tooling, consumables and profit margin are separate decisions layered on top, not part of this number.
Every "typical shop rate" table online is an average of businesses that aren't yours — different rent, different insurance, different machine age. Ryxen doesn't know your utility bill or your lease, and pretending to would make this less accurate, not more.
So this calculator does the one thing it can actually be right about: the arithmetic. You supply the real numbers, it shows the real formula, and the result is only as good as what you put in — same as it should be.