Automation ROI & payback calculator
Build a simple undiscounted business case with installed investment, realizable annual benefit, recurring cost and a chosen horizon.
Result
Inputs used
- Installed investment (currency)
- 100000
- Realizable annual gross benefit
- 45000
- Additional annual operating cost
- 10000
- Evaluation horizon (years)
- 5
| Annual net benefit | 35000 currency/year |
|---|---|
| Annual net benefit / investment | 35 % |
| Net gain over selected horizon | 75000 currency |
| Horizon simple ROI | 75 % |
| Simple payback | 2.857143 years |
Constant annual benefits; undiscounted, before tax and financing. Include integration, validation and training in installed investment. Count only realizable benefits.
From the maintainer: Understanding the Shop Floor — a practical companion to the systems behind these tools; also How to Remain Valuable When Intelligence Becomes Cheap — on staying valuable as AI and automation reshape engineering work.
Formula and worked example
Annual net benefit = annual gross benefit − additional annual operating cost. Simple payback = installed investment / annual net benefit, when that benefit is positive. Horizon ROI = (net benefit × years − investment) / investment × 100%.
For installed investment of 100,000, annual benefit of 45,000 and recurring cost of 10,000, net annual benefit is 35,000. Payback is 2.8571 years. Over five years, undiscounted net gain is 75,000, giving a horizon ROI of 75%. The separate annual benefit/investment ratio is 35%; it is not the same as five-year ROI.
Include the whole installation
Include integration, guarding, tooling, commissioning, training and validation in investment. Include licenses, maintenance, consumables and support in recurring costs. Labor time released is a cash saving only when staffing or another real cost changes; otherwise quantify the capacity or redeployment benefit separately.
This is a screening model with constant annual benefits. It excludes discounting, tax, financing, depreciation, ramp-up, residual value and replacement expenditure. Use a cash-flow model for investment approval and test a conservative benefit scenario.
Frequently asked questions
What happens if recurring costs exceed benefits?
The tool reports negative net benefit and no finite payback rather than displaying a negative payback period.
Can I use downtime savings as a benefit?
Use only the recoverable contribution supported by demand and constraint evidence. The downtime cost calculator helps separate contribution at risk from automatic revenue claims.
Go deeper
Cite this page: Automation ROI & payback calculator
, Shopfloor. https://shopfloor.space/tools/automation-roi-calculator/