Overhead Recovery Calculator: what to add to every job
Annual overhead — the costs you pay whether or not you're on a job:
Your volume, so the overhead can be spread:
Add to every job for overhead
20.0% of direct costs
- Total annual overhead
- $48,000
- Overhead per billable hour
- $15.00/hr
- Example: $2,000-direct-cost job carries
- $400.00
Two ways to recover the same overhead: add the percentage to every job's direct costs, or add the per-hour figure to every billed labor hour. Pick one, apply it to EVERY job, and remember: overhead recovery gets you to break-even — profit margin goes on top (run the markup & margin calculator next).
How this calculator works — the formula
overhead recovery % = annual overhead ÷ annual direct job costs × 100
overhead per hour = annual overhead ÷ annual billable field hours
Worked example: $48,000 overhead against $240,000 of annual direct costs = 20% — a job with $2,000 of materials and labor must carry $400 of overhead before any profit is real. The per-hour method spreads the same overhead over billable hours instead; use it if your jobs are labor-heavy and material-light.
Questions contractors actually ask
What counts as overhead vs job costs?
Job (direct) costs exist only because of a specific job: its materials, field labor, subs, permits, dump fees. Overhead exists whether or not you work: vehicles, insurance, tools, software, phone, office, marketing, licenses. If firing a job wouldn't make the cost disappear, it's overhead.
What is a normal overhead percentage for a contractor?
Small trades shops typically run 15–35% of direct costs; shops with an office, a yard, and admin staff run higher. The number itself matters less than actually applying YOUR number to every bid — unrecovered overhead comes straight out of profit.
Is profit included in the overhead percentage?
No — recovery gets you to break-even. Stack your profit margin on top using the markup & margin calculator: loaded cost = direct cost × (1 + overhead%), then price = loaded cost ÷ (1 − target margin).
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