Contractor Money Tools

Company overhead planning

Contractor Overhead Calculator

Add up the indirect cost of keeping your business running, then see how the same annual overhead looks using different recovery bases.

Step 1

Enter annual overhead

One overhead total, with multiple recovery views later.

Overhead entry

Administrative payroll: company-level office or administrative payroll selected for overhead recovery—not direct field labor already treated elsewhere.

Insurance / bonding: avoid counting workers’ compensation already in labor burden or job-specific insurance directly costed elsewhere.

Vehicles / transportation: use indirect fleet costs, not vehicle, travel, or delivery costs assigned directly to jobs.

Your annual overhead

Enter at least one overhead amount to see your annual total.

No benchmark assumptions have been prefilled.

Step 2 — optional

See the same overhead using different recovery bases

Leave any field blank if that recovery view is not useful to you.

What these numbers mean

Different views of the same company overhead

These rates recover the same annual overhead using different allocation bases. The best basis depends on how your business prices and tracks work.

Got your recovery rates? Learn how to choose an overhead allocation method for your jobs.

Revenue view expresses overhead as a share of annual revenue.

Labor-dollar view spreads overhead across direct labor cost.

Direct-cost view spreads overhead across annual direct job costs.

Productive-hour view spreads overhead across productive field labor hours.

Same overhead, different denominators

The percentages are not interchangeable

$100,000 overhead ÷ $500,000 revenue= 20% of revenue

$100,000 overhead ÷ $400,000 direct job cost= 25% of direct cost

Both describe the same $100,000 annual overhead using different denominators.

Methodology

How the calculator works

Total annual overhead = sum of active categories, or the user-entered annual total

Monthly overhead = annual overhead ÷ 12

Weekly overhead = annual overhead ÷ 52

Overhead as % of revenue = annual overhead ÷ annual revenue

Overhead per direct labor dollar = annual overhead ÷ annual direct labor cost

Overhead per direct-cost dollar = annual overhead ÷ annual direct job costs

Overhead per productive field hour = annual overhead ÷ annual productive field hours

Overhead is a business cost. Profit is not included in overhead. This calculator does not calculate profit, markup, selling price, or job margin.

Do not include the same cost in both labor burden and business overhead if your pricing model would recover it twice. Accounting classifications can differ, but every cost needs a consistent place in the pricing model.

Calculating employee productive-hour cost instead? Use the Labor Burden Calculator.

If you're an owner-operator, use your annual overhead to calculate the hourly rate your business needs to charge with the Contractor Hourly Rate Calculator.

Ready to apply costs and allocated overhead to a job price? Use the Contractor Markup Calculator. Your business still needs to choose an allocation method appropriate to its pricing and records.

This calculator provides business planning and educational information—not tax, accounting, legal, or financial advice.

FAQ

Contractor overhead questions

What counts as contractor overhead?

Overhead generally includes indirect company costs selected for recovery, such as office, administrative, insurance, software, marketing, professional, and shop expenses. Classification depends on how the business tracks and prices work.

How do I calculate annual overhead?

Add the active annual overhead categories, or enter a known annual total from your accounting or internal records.

What is overhead as a percentage of revenue?

It is annual overhead divided by annual revenue, expressed as a percentage.

How do I calculate overhead per direct labor dollar?

Divide annual overhead by annual direct labor cost. The result shows how much overhead corresponds to each $1 of direct labor.

How do I calculate overhead per productive labor hour?

Divide annual overhead by annual productive field labor hours.

Which overhead recovery method should a contractor use?

There is no universal method. The useful basis depends on how the business prices, performs, and tracks its work.

Is overhead the same as profit?

No. Overhead is business cost. Profit is not included in this calculator.

How do I avoid double-counting labor burden and overhead?

Define where each cost is recovered and use that treatment consistently. Do not include the same expense in both if the pricing model would recover it twice.