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Overhead Rate Calculator
Overhead is the cost of being in business whether or not you work today. Add it up here and this tells you what percentage every job must carry, and what it costs you per billable hour.
Your numbers
Result
Overhead rate
19.7
%
- Overhead per billable hour
- $20
- Total annual overhead
- $63,100
- Per month
- $5,258
- Per working day250 days a year
- $252
- Markup just to cover overhead
- 24.6%
- Revenue needed at 35% gross margin
- $180,286
How this is calculated
- Total overhead = every cost that is not direct job labour or materials.
- Overhead rate = total overhead ÷ annual revenue × 100. This is the number to plug into a job cost estimate.
- Overhead per billable hour = total overhead ÷ hours you actually invoice.
- Break-even revenue = overhead ÷ your gross margin.
Before you order
- Billable hours are not hours worked. Drive time, quoting, invoicing and chasing payment are all real hours that no customer pays for — and counting them as billable is how the rate comes out too low.
- Your own non-field time belongs in overhead. Leaving the owner's salary out is the most common way a business looks profitable while the bank account does not agree.
- Recalculate this at least yearly. Adding a truck or a phone line moves it more than people expect.
- Overhead is only half the price. Profit sits on top of it — see the job cost and markup calculators.
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