Buying guide

Laser Cutting Cost Per Hour: How to Calculate It Properly

Updated 2026-10-13 · 5 min read

Hourly rates in this industry are often quoted as a single number with no visible arithmetic behind them, which makes them impossible to compare or challenge. The rate is not a market fact; it is the result of six inputs, and every shop's inputs are different.

The six components

1. Machine depreciation

Take the delivered cost of the machine — including installation, chiller, extraction and any loading equipment — and divide it over its productive life.

`` Annual depreciation = delivered cost ÷ expected life in years ``

A machine is usually costed over 7–10 years. Divide by the hours you actually expect to run it, not the hours in a year.

2. Cost of capital and floor space

If the machine is financed, the interest is a real cost. Floor space is a real cost too, even if it is not invoiced — the square metres the machine and its material staging occupy could hold something else, or cost rent.

3. Power

Add up everything that draws current, not just the laser:

• Laser source and its efficiency losses
• Chiller
• Extraction and fume handling
• Compressed air (if you generate it) or the nitrogen generator
• Servo drives, control, lighting

Fiber lasers are efficient at the source, but the chiller and extraction run continuously and are easy to forget.

4. Assist gas

This is where estimates most often go wrong. Nitrogen is expensive and its consumption scales with thickness and pressure.

Cutting stainless at 16–18 bar for thick material consumes far more gas than cutting 1 mm at 8 bar. If your work is stainless-heavy, gas supply arrangements — bulk tanks or an on-site generator — deserve serious attention, because the per-part difference is large.

5. Consumables

Nozzles, protective windows, focus lenses, ceramic rings, filters and chiller water treatment. These are small per part but they are not zero, and they rise sharply if the machine is run with worn consumables because scrap rises with them.

6. Labour and overhead

The operator, plus the share of supervision, quoting, administration, software licences, insurance and maintenance attributable to the machine.

On a single-table machine the operator is often loading and unloading as much as cutting, so labour should be allocated by the time the machine occupies the operator — which is usually more than the cut time.

Building the hourly rate

`` Hourly rate = (annual depreciation + annual capital and space + annual power + annual gas + annual consumables + annual labour + annual overhead) ÷ realistic productive hours per year ``

Two things decide whether the result is honest:

Productive hours, not calendar hours. A machine available 4,000 hours a year and cutting 55% of that has 2,200 productive hours. Costing the rate over 4,000 understates it by nearly half and hides an unprofitable job.

Include setup and idle time. If a job needs a fixture change and a parameter change, those hours are paid for by someone.

Worked example (illustrative)

A single-table 3 kW fiber laser, one shift, with a realistic utilisation of 55%.

At 2,000 productive hours a year, the rate is roughly €52 per hour. Note what dominates: labour and depreciation together are about two thirds. Power is under 5%.

These numbers are illustrative — substitute your own. The structure is the point: if your shop quotes a materially different rate, you should be able to point at which line differs.

From hourly rate to cost per part

`` Cost per part = (cut time + handling time + setup ÷ batch size) × hourly rate + material used per part + finishing and inspection + scrap allowance + margin ``

Where shops lose money:

• Forgetting handling time. On thin sheet it can exceed cut time.
• Amortising setup over the wrong batch size. Setup on a batch of three is a large per-part cost.
• Omitting the scrap allowance. Nesting waste and rejects are real.
• Treating material as free because it was in stock. It was not.
• Ignoring finishing. Deburring is labour.

Comparing processes fairly

When comparing laser with plasma or waterjet, compare cost per finished part, not cost per hour. A slower process with cheaper consumables and no secondary operation can win on some work.

Also price the secondary operations. A plasma edge that needs grinding may erase plasma's hourly advantage.

Deciding whether to add a machine

1. Identify the work you currently send out or turn away.
2. Calculate the contribution margin that work would generate in-house.
3. Subtract the incremental costs: financing, space, power, gas, any added labour.
4. Compare the result against your payback horizon.

If the incremental work does not cover the incremental cost within your horizon, the machine is not justified — regardless of how good the rate looks. Buying capacity you cannot fill is the most common expensive mistake in this category.

Where we sit

We sell machines, so we benefit from capacity decisions. The honest framing: a machine pays for itself when you have work for it. The arithmetic above is what we would want a customer to run before ordering, and we would rather lose an order to a shop that correctly concluded it did not yet have the volume.

If you send us your material mix, thicknesses and rough volumes, we will help you work through the throughput side of this — and tell you if the answer is that you do not need a new machine yet.