- This tool allocates monthly overhead costs to each job using billable hours as the basis.
- Contractors input total overhead and hours per project to get a per-job overhead figure.
- It helps ensure every job carries its fair share of business running costs.
- Accurate overhead allocation leads to better pricing decisions and improved profitability.
Overhead & Indirect Cost Allocator
Allocate monthly overhead fairly to a job using billable hours.
About this calculator
Allocate monthly overhead to each job using billable hours.
How does the Overhead Allocator calculate costs per job?
The calculator divides your total monthly overhead by your total billable hours to find an overhead rate per hour. It then multiplies that rate by the billable hours assigned to each specific job, giving you the overhead amount that job should carry.
What counts as overhead for contractors?
Overhead typically includes fixed and variable business expenses not tied to a single job, such as office rent, insurance, vehicle costs, software subscriptions, admin wages, and utilities. These are the recurring costs of running your contracting business regardless of how many jobs you have.
Why should contractors allocate overhead to individual jobs?
Allocating overhead to each job ensures your quotes and invoices cover all business costs, not just direct materials and labour. Without it, you may underprice work and unknowingly erode your profit margin, making the business unsustainable over time.