Contract Rate Calculator

What is this page?

This page enables users to calculate a contractor rate by factoring in depreciation and interest expenses for their tractors and implements, contract labour and profit margin – in addition to the Fuel, Oil, Repairs and Maintenance (FORM) costs transferred from the Machinery Setup page.

Calculating Contract Rates

A contractor rate for each tractor and implement combination is calculated with the following steps:

Calculation Parameters

1. Enter the average ‘Interest Rate’ paid on loans for new machinery (%), to factor in an opportunity cost. For example, 7 percent.

2. Enter the ‘Contract Labour Rate’ in dollars per hour ($/hr). For example $35/hr.

3. Enter a suitable ‘Profit Margin' as a percentage (%). For example, 10%.

4. Click on the ‘Submit’ button.

Calculator Table

1. Click on the edit button for the tractor or implement to calculate a contract rate for.

2. Enter the price paid for the tractor or implement.

3. Enter an estimate of the salvage value of the tractor or implement. For example, 15 years.

• This is an estimate of how much the tractor or implement could be sold for at the end of its expected productive life.

4. Click on the submit button and a contracting rate ($/ha) will be shown in the table in the farthest right column.

• This is the Total FORM, interest, labour and depreciation + profit figure.
• The life of the tractor and the implement is very important for the depreciation calculation.

Irrigation Setup ⇐|⇒ Depreciation