Contractor Overhead Calculator Formula
Understand the math behind the contractor overhead calculator. Each variable explained with a worked example.
Formulas Used
Overhead Rate
overhead_rate = revenue > 0 ? (overhead_costs / revenue) * 100 : 0Revenue After Overhead
revenue_after_overhead = revenue - overhead_costsMonthly Overhead
monthly_overhead = overhead_costs / 12Variables
| Variable | Description | Default |
|---|---|---|
overhead_costs | Total Overhead Costs(USD) | 45000 |
revenue | Total Revenue(USD) | 300000 |
How It Works
How to Calculate Contractor Overhead Rate
Formula
Overhead Rate = (Overhead Costs / Revenue) x 100
Overhead includes all indirect costs of running your business: insurance, rent, utilities, vehicle expenses, office supplies, accounting, marketing, and administrative salaries. Knowing your overhead rate helps you price jobs correctly.
Worked Example
A contractor has $45,000 in annual overhead costs and $300,000 in annual revenue.
overhead_costs = 45000revenue = 300000
- 01Overhead rate = ($45,000 / $300,000) x 100 = 15%
- 02Revenue after overhead = $300,000 - $45,000 = $255,000
- 03Monthly overhead = $45,000 / 12 = $3,750
Ready to run the numbers?
Open Contractor Overhead Calculator