Total Cost of Ownership Calculator
Calculate TCO step by step: price + setup + running costs over the period + disposal − residual value.
In short
Formula: TCO = price + setup + (operating + maintenance) × years + disposal − residual value.
What this calculator does
Calculate TCO step by step: price + setup + running costs over the period + disposal − residual value. Worked example, questions and limitations included.
Use it to turn Currency (symbol only, never converted), Purchase price, Installation, setup and training, Annual operating cost, and the other shown inputs into a checked result you can compare, copy, or rerun with different assumptions.
The page shows the formula, a numeric worked example, and the assumptions that affect this procurement calculation.
Inputs and what they mean
- Currency (symbol only, never converted)
- — choice value.
- Purchase price
- — number value.
- Installation, setup and training
- — number value.
- Annual operating cost
- — number value.
- Annual maintenance cost
- — number value.
- Ownership period
- — number value.
- End-of-life disposal cost (enter 0 if none)
- — number value.
- Resale or residual value (enter 0 if none)
- — number value.
How to use it
- Enter each value in the unit shown next to the box (use the unit converter first if your numbers are in other units).
- Check the breakdown to see every intermediate step.
- Read the limitations before relying on the result.
Formula
Total cost of ownership as defined in the ASCM dictionary.
For cloud services use the cloud TCO calculator instead.
All figures are yours; no lifetimes or rates are assumed.
TCO = price + setup + (operating + maintenance) × years + disposal − residual value.
Inputs used: Currency (symbol only, never converted), Purchase price, Installation, setup and training, Annual operating cost, Annual maintenance cost, Ownership period, End-of-life disposal cost (enter 0 if none), Resale or residual value (enter 0 if none).
Worked example
Forklift
- Running = 55,000.
- 50,000 + 5,000 + 55,000 + 2,000 − 10,000 = $102,000.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
- Undiscounted.
- Flat annual costs.
- No downtime cost unless included.
- Results are planning estimates built only from the figures you enter. No prices, rates, demand patterns or service levels are built in, and the results are not supplier quotes or carrier rates.
- The result depends on the values you enter for this total cost of ownership calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.
Common questions
Why does TCO matter?
Purchase price is often under half of what an asset costs over its life. Check the formula, example, and limitations on this page before using the result for a real procurement decision.
Should I include financing?
Add interest to operating cost, or compare financing separately. Check the formula, example, and limitations on this page before using the result for a real procurement decision.
Compare two options?
Run each and compare totals over the same period. Check the formula, example, and limitations on this page before using the result for a real procurement decision.
How do I use the Total Cost of Ownership Calculator?
Enter the required values for Currency (symbol only, never converted), Purchase price, Installation, setup and training, Annual operating cost, Annual maintenance cost, and the other fields shown. The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.
What formula does the Total Cost of Ownership Calculator use?
TCO = price + setup + (operating + maintenance) × years + disposal − residual value. The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone.
Can the Total Cost of Ownership Calculator be used for exact decisions?
Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.
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