Machine Shop Rates – What’s the Average Hourly Rate

What Machines Are in the Shop?

A shop’s equipment is one factor in its hourly rate. Larger and more powerful machines generally have higher operating and overhead costs, but they can also handle work beyond the capabilities of a small job shop.

What Kind of Shop Is It?

Hourly rates can vary substantially between production facilities and job shops. Production shops are often larger operations with machines capable of producing dozens or hundreds of parts at a time. Efficiency is critical, and their rates may be higher, although large orders can be completed much faster.

Smaller job shops commonly specialize in prototypes and short production runs. Their hourly rates may be lower, but setup time can make the cost per part considerably higher. In general, producing more units reduces the setup cost allocated to each part.

Quality or Quantity?

Large, powerful CNC machines do not automatically make a shop better. A small three-person operation can surpass a 20,000-square-foot facility in workmanship. Meeting a customer’s requirements depends on having machinists who understand the complete manufacturing process.

Creating a CAD/CAM program and loading it into a machine is only part of the work. Programming may sometimes be one of the easier stages. More difficult decisions include:

• Designing a fixture that holds the workpiece securely and accurately
• Selecting tools with the appropriate size, length, and material
• Choosing efficient speeds and feeds
• Balancing shorter cycle times against tool wear and machine downtime

A fast cycle is not economical if tools must be replaced every few parts. Tool consumption and the downtime required for replacement both contribute to the true cost of production.

Typical Machine-Shop Rates

The article identifies several broad hourly-rate ranges. These are historical figures from the original 2013 publication and should not be treated as current market quotes.

• $40–$55 per hour: Described as inexpensive for the manufacturing industry. A shop in this range may rely mainly on manual mills and lathes and may suit parts with generous tolerances.
• $60–$80 per hour: Presented as the average range across many parts of the United States at the time of publication.
• $100 per hour or more: Associated with large shops, costly machinery, substantial overhead, and experienced machinists performing demanding work.

Electricity and general overhead affect what a shop must charge, but the required quality and type of work are especially important. Prototypes and short runs are expensive because setup time is spread across relatively few parts. Tight tolerances also narrow the selection of capable suppliers.

High-precision shops can charge more when competing facilities cannot match their quality. Their rates must cover machinery, cutting tools, inspection equipment, coolant and chemicals, electricity, downtime, machinists, programmers, and a sustainable profit.

Choosing a Shop

The appropriate rate ultimately depends on the work. Parts requiring close tolerances, careful finishing, or dependable inspection are usually worth placing with a shop that can demonstrate the necessary expertise. Paying a lower hourly rate offers little benefit if completed parts must be rejected because they do not meet specifications.