Calculators
Construction Overhead Calculator
Calculate a construction company's overhead rate on direct costs, the markup needed to recover it and overhead per labour hour.
- Runs in your browser
- Nothing uploaded
The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
Everything you enter stays on your own machine. Nothing is sent to us or to anyone else, which you can confirm in your browser network tab.
What people use it for
- Setting bid markups
- Annual business planning
- Diagnosing low profits
- Explaining pricing to partners
About this tool
What the Construction Overhead Calculator does
Overhead covers everything a construction business spends that is not tied to a single job: office, vehicles, insurance, estimating and admin staff. Expressing it as a percentage of direct job costs gives the markup every bid needs just to break even, before any profit.
Formula
- Overhead rate = annual overhead ÷ annual direct costs
- Break-even price = direct costs + overhead
- Markup = (price with profit − direct costs) ÷ direct costs
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Annual overhead | 7 entries |
| Annual direct job costs | $1,600,000 |
| Annual field labour hours | 24,000 |
| Target profit on price | 10% |
| Result | Value |
|---|---|
| Overhead as share of direct costs | 16.4% |
| Markup on direct cost for overhead and profit | 29.4% |
| Annual overhead | $263,000 |
| Overhead per field labour hour | $10.96 |
| Overhead as share of revenue | 12.7% |
How to read the result
Recalculate when volume changes. If revenue falls but overhead stays, the overhead percentage on each job rises.
Allocating overhead per labour hour suits labour-heavy trades; percentage of direct cost suits material-heavy work.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
Business costs not tied to a specific job, such as office rent, insurance, vehicles and admin staff.
It varies by company size and trade; many contractors fall somewhere between 10% and 20% of revenue.
The part of the owner's time not charged to jobs should be.
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