Thank a lot of the promot reply.
I will raise the z axis more. The bit is all the way in, lots of chips/dust was coming out it was flying away from the machine the entire time. It was going smoothly until it broke through. One thing i noticed the depth of cut doesnt seem to be constant across the entire rectangle which made me suspect the perpendicularity of the surface, given the cut started at the top so it shouldve broke through there. But how can i align the sheet against the z axis?
Thanks a lot!