Tracking Equipment Rental Costs per Job

Construction businesses need to accurately track equipment rental costs per job to ensure profitability and manage budgets effectively. To start, identify the types of equipment rented, including the type of rental agreement, rental period, and rental value. This means that the business can claim the full depreciation value of the equipment on its tax return, with no limitation on the amount. For the bigger picture, see our guide to construction expense management for under $10/user (2026). For a complete overview, see our expense management guide.

Tag every case to a dentist

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Tag every case to a dentist

To accurately track equipment rental costs per job, small construction businesses should implement a system that tags every case to a dentist. This means that every time an equipment rental cost is incurred, it should be associated with a specific case. This can be done by using a case-based numbering system, where each case is assigned a unique number. This way, when the business needs to claim the equipment rental cost for a specific job, it can simply refer to the corresponding case.

The dentist case number should be used consistently across all cases, and it should be clear what the purpose of each case is (e.g. "Case 1234: Construction Project X"). This will help the business to maintain a clear and organized system, making it easier to track and analyze equipment rental costs.

To implement this system, the business should start by documenting their current equipment rental costs and cases. They should also establish a process for assigning case numbers to each equipment rental cost, and ensure that all relevant documentation is kept up-to-date. Once the system is in place, it should be simple to tag every case to a dentist, and to track equipment rental costs per job.

Categorize equipment rental costs

Here is the section titled "Categorize equipment rental costs":

1. Identify the types of equipment that are rented for use in your trade or business. These can include equipment such as cranes, excavators, generators, and construction vehicles. Make sure to document the specific equipment rented and the dates of use.
2. Categorize the equipment rental costs based on the type of equipment and the purpose of use. For example, equipment used for building construction may be categorized as a capital asset, while equipment used for general construction may be categorized as an operating expense.
3. Note that rental costs must be capitalized (not deducted currently) if the equipment is used for constructing capital assets for your business or if required under Uniform Capitalization Rules. This means that the rental costs for equipment used for construction should be recorded as a capital asset rather than an operating expense.
4. Keep records of all equipment rental costs, including receipts, invoices, and bank statements.
5. This includes equipment used for business purposes, but also personal use, such as using a company vehicle for non-business purposes.
6. For equipment rented for use in your trade or business, make sure to keep records of the rental period, rental amount, and depreciation method used.

Calculate equipment rental costs per job

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Calculate equipment rental costs per job

1. Gather all job-related rental equipment expenses, including vehicles, tools, and other equipment, and note the dates of use for each item. This will be your input for calculating equipment rental costs per job.
2. Determine the total cost of ownership for each piece of equipment, including depreciation and amortization. This will be your basis for calculating the total rental cost per job.
3. Identify the percentage of total rental cost that is attributable to each piece of equipment. This is usually the cost of the equipment as a percentage of its total cost of ownership.
4. Multiply the total rental cost per job by the percentage of total rental cost attributable to each piece of equipment to calculate the equipment rental cost per job. This will give you the total rental cost per job for the year.
5. Consider using a tax calculator or spreadsheet to help with the calculation, as the exact formula may vary depending on the specific equipment and job details.

Track and report equipment rental costs

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1. Identify equipment rental expenses. Keep a log or spreadsheet to track all equipment rental costs for each job, including dates, locations, and vendors. This will help you to identify recurring expenses and make it easier to calculate costs per job.
2. Categorize equipment rental costs. Use a standardized system to categorize your equipment rental expenses, such as by job type (e.g. residential, commercial), equipment type, or vendor. This will make it easier to compare costs and make decisions about where to allocate your expenses.
3. Calculate equipment rental costs per job. Once you have tracked and categorized your equipment rental expenses, you can calculate the cost per job. This can be done by dividing the total equipment rental costs for a job by the number of hours worked on the job or by the total amount of equipment rented.
4. Track and report equipment rental costs. Make sure to keep accurate records of your equipment rental costs, including receipts, invoices, and labor hours.