Downtime Cost Calculator

Calculate the total cost of operational or system downtime including lost revenue, idle labour, recovery effort, and the customer impact most estimates omit.

💸 Operations📐 Downtime cost = lost revenue + idle labour + recovery + customer impact💼 Business

Downtime duration (hours)

Revenue per hour of normal operation

Percent of revenue truly lost (%)

Idle staff affected

Average loaded hourly cost per staff

Recovery and remediation cost

Customer credits or SLA penalties

Please enter valid values.

Formula & Reference

Variable	Symbol	Formula	Units
Downtime Cost Calculator	—	Downtime cost = lost revenue + idle labour + recovery + customer impact	currency

Step-by-Step Examples

Example 1

System Outage

6 hours, 4,200 revenue/hr, 70% truly lost, 18 idle staff at 48/hr, recovery 3,500, credits 2,000.

Lost revenue = 4,200 × 6 × 0.70 = 17,640
Idle labour = 18 × 48 × 6 = 5,184
Total = 17,640 + 5,184 + 3,500 + 2,000 = 28,324
Cost per hour = 4,721

✓ 28,324 — 4,721 per hour

Example 2

Fully Recoverable Work

4 hours, 3,000 revenue/hr, 0% permanently lost, 10 staff at 40/hr, recovery 800.

Lost revenue treated as 100% when left blank — here set explicitly low
Idle labour = 10 × 40 × 4 = 1,600
Where orders are simply delayed, labour and recovery dominate

✓ Labour and recovery are the real cost

Example 3

Short but Expensive

1.5 hours, 22,000 revenue/hr, 90% lost, 40 staff at 55/hr, recovery 12,000, credits 15,000.

Lost revenue = 22,000 × 1.5 × 0.90 = 29,700
Idle labour = 40 × 55 × 1.5 = 3,300
Total = 29,700 + 3,300 + 12,000 + 15,000 = 60,000
Cost per hour = 40,000

✓ 60,000 in 90 minutes

Real-World Applications

💰

Redundancy Business Case

Quantified downtime cost is what justifies investment in redundancy, backups, and failover — otherwise pure expense on paper.

⚖️

SLA Negotiation

Understanding your own cost per hour informs what service level guarantees are worth paying for.

🔧

Maintenance Scheduling

Comparing downtime cost across time windows shows when planned maintenance is least expensive.

📊

Incident Prioritisation

Cost per hour helps triage which systems warrant the fastest response.

Common Mistakes to Avoid

⚠️

Assuming all revenue during downtime is lost

In many businesses orders are delayed rather than lost. Applying 100% loss overstates cost, sometimes substantially.

⚠️

Omitting idle labour

Staff continue being paid while unable to work. In labour-intensive operations this can exceed lost revenue.

⚠️

Ignoring reputational and churn effects

Repeated outages drive customers away. This cost appears in later periods and is rarely attributed back to the incidents that caused it.

Frequently Asked Questions

How do I calculate downtime cost? ▾

Add lost revenue, idle labour cost, recovery and remediation expense, and any customer credits or contractual penalties.

Should I count all revenue as lost? ▾

Only the portion that does not return. Where customers simply order later, the true loss is much smaller than the gross revenue figure.

What is a typical cost per hour? ▾

It varies enormously by business. What matters is calculating your own figure, since it drives redundancy and SLA decisions.

Does downtime cost include reputation damage? ▾

It should, though it is hard to quantify. Elevated churn following outages is real but shows up in later periods.

How does this justify redundancy spending? ▾

Comparing annual expected downtime cost against the cost of redundancy makes the investment decision quantitative rather than intuitive.