What does your overhead mean for your price?
Put in a year of overhead and a year of sales. You’ll see your overhead rate, the markup on job cost that covers it and your profit, and what every working day costs before a crew starts.
Last year’s, or what you expect this year — everything you billed.
The math
- Overhead rate
- Overhead for the year ÷ sales for the year.
- Margin needed
- Overhead rate + the profit you want, both as a share of the price.
- Markup on job cost
- Margin ÷ (1 − margin). Price = job cost ÷ (1 − margin).
Questions contractors ask
- What counts as overhead?
- Every cost of running the business that isn’t charged to a particular job: the office or shop, insurance you don’t bill to jobs, vehicles and fuel used for running around, office wages, your own pay when it isn’t on a job, software, marketing, accounting. Materials, crew labor and subs on a job are job cost, not overhead.
- Why isn’t the markup just overhead plus profit?
- Because overhead and profit are shares of the PRICE, and markup is added to COST. With 15% overhead and a 10% profit goal you need 25% of every price left after job cost — a 33.3% markup. Adding 25% onto cost leaves only 20%.
- Which sales figure should I use?
- Last year’s total billed, or what you honestly expect this year. A slow year spreads the same overhead over fewer sales, so your rate goes up — run it both ways if this year looks different.
- Is anything I type stored?
- No. The numbers stay in your browser; the page sends only an anonymous count that the calculator was used.
Keep the rate current without redoing this
Partner computes your overhead rate from your own overhead and sales as they happen and loads it into every estimate as a cost — so a slow quarter shows up in your prices before it shows up in your bank account.
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