Contract Rate Calculator

The ‘Contract Rate Calculator’ is an additional calculator located in the navigation pane on the left side of the page. It 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 costs transferred from the Machinery Setup page. A contractor rate for each tractor and implement combination can be calculated by entering:

1. The average ‘Interest Rate’ paid on loans for new machinery (e.g. 7%) to factor in an opportunity cost.
2. The ‘Contract Labour Rate’ (e.g. $35/hr).
3. A suitable ‘Profit Margin (e.g. 10%).
4. Click on the ‘Submit’ button.
5. Click on the edit button for each tractor and implement that users want a contract rate calculated for.
6. The price paid for the tractor or implement.
7. An estimate of the salvage value of the tractor or implement, which is an estimate of how much the tractor or implement could be sold for at the end of its expected productive life (e.g. 15 years).
8. Click on the submit button and a contracting rate ($/ha) will be shown in the table in the farthest right column. This is the Total FORM, interest, labour and depreciation + profit figure.

Navigate to the next wiki page --> Depreciation