CALCULATOR · 7 SECTIONS · ABOUT TWO MINUTES

YOUR REAL OVERHEAD RATE.

Almost every subcontractor bids 10 percent. Most run between 25 and 42once owner pay and equipment are counted honestly. Work out which you are, one section at a time.

One figure per section, at the frequency you pay it. Skip anything that doesn't apply. The line items under each section are what belongs in it, so use them as the checklist.

01OFFICE REQUIREMENTS

AMOUNTHOW OFTEN

PER YEAR-

Office Rent / Lease / Mortgage · Electric · Water · Internet · Trash · Security · Laydown Yard · Warehouse · Office Supplies · Office Equipment · Telecom · Mobile Phones

02SOFTWARE SUBSCRIPTIONS

AMOUNTHOW OFTEN

PER YEAR-

Bluebeam · Fieldwire · BuildingConnected · ControlQore · ConstructIQ · Perplexity Computer Pro

03ADMINISTRATIVE EXPENSES

AMOUNTHOW OFTEN

PER YEAR-

IT Services / Maintenance (if outsourced) · Website · Legal Fees (if outsourced) · Payroll Services (if outsourced) · SPM + CQ · Employee Benefits · Employee Payroll Taxes · Licensing and Continuing Education · Training and Development Programs · Fractional Employees · Advertising and Marketing

04OWNED EQUIPMENT · IDLE TIME

AMOUNTHOW OFTEN

PER YEAR-

Fuel (not job-specific) · Maintenance (routine, not job-specific) · Registration Group 1 · Registration Group 2 · Fleet Management Software

05INSURANCE

AMOUNTHOW OFTEN

PER YEAR-

General Liability · Workers' Compensation · Life Insurace · Vehicle Insurance

06NON-DIRECT JOB EMPLOYEES

AMOUNTHOW OFTEN

PER YEAR-

Estimating Team · Project Management · Safety Manager · Warehouse Employees · Delivery Drivers · CAD / BIM (if in house) · Accounting Employees (if in house) · Payroll Employees (if in house) · Legal (if in house) · Marketing (if in house) · Training and Development · C Suite Employees · Business Development Team

07MISCELLANEOUS

AMOUNTHOW OFTEN

PER YEAR-

Union Dues · Business Taxes · Annual Business License Renewal · Property Taxes

YOUR REVENUE

LAST 12 MONTHS ACTUALTHIS YEAR TARGET (OPTIONAL)

TOTAL OVERHEAD-

Both rates get shown. The one against actual revenue is what your overhead really was. The one against target is what it becomes if the year goes to plan, and the distance between them is why this gets recalculated more than once a year.

YOUR RATE IS READY

Enter who you are and an email and the rate appears below. The same submission emails you the Overhead Calculator, the workbook this page is built on, which goes line by line across all 55 cost items and is the file you paste into a cash flow forecast later. Free, and the numbers you typed above aren't sent with it.

THE BENCHMARK

9 TO 13 IS HEALTHY. 10 IS THE MYTH.

These three figures are the benchmark line from the bottom of Josh's own overhead calculator, and they're the reason this page exists.

HEALTHY, 9 TO 13 PERCENT

A well run commercial subcontractor with equipment charged to jobs, owner compensation defined, and supervision split by utilization. It's reachable, and getting there's usually about moving costs to where they belong rather than cutting them.

WHERE MOST ARE, 25 TO 42 PERCENT

What the rate comes to once owner pay goes in at market rate and the fleet stops hiding in overhead. Most contractors have never seen this number for their own company, because nobody computes it until somebody makes them.

THE MYTH, 10 PERCENT

The figure that gets bid, usually because it's what somebody said at a trade association meeting years ago. A contractor bidding 10 with a real rate of 18 is giving up 8 points on every job he wins, and every report he has will show the jobs performing to budget.

WHAT TO DO WITH THE NUMBER

THE RATE IS STEP ONE OF TWO.

Knowing the rate changes nothing on its own. It has to reach the bid, and it has to reach the forecast, and those are two different jobs.

Into the bid. Apply the real rate to work not yet priced. It does nothing for contracts already signed, which is why every week of delay is another job priced at the old number.

Into the forecast. Overhead is the most predictable outflow a construction business has, which makes it the reliable half of a cash forecast. The workbook's WHEN PAID column exists so the timing travels with the figures when you paste them across.

Onto the right basis. A correct rate spread across the wrong denominator still misreads every job. Whether you absorb overhead on revenue, labor hours, labor dollars, direct cost or equipment hours is a separate decision and it changes which of your jobs look profitable.

Recalculated when the company changes. Annually at minimum, and immediately after a hire, a machine or a facility. A rate that hasn't moved since revenue changed is wrong in the optimistic direction by definition.

Which basis fits your workThe method, in fullThe 13 week forecast

$10.7M+

Client AR Recovered Since 2023

Active Trade Specializations

60 DAYS

Average Onboarding Time

COMMON QUESTIONS

OVERHEAD, ANSWERED.

How do you calculate a construction overhead rate?

Total annual fixed costs divided by annual revenue. Fixed cost is anything that runs whether or not a job is active: office, software, insurance, non-direct staff, owner compensation at market rate, and the equipment cost that's not charged to a job. Put each cost in at the frequency you pay it, annualize it (weekly times 52, monthly times 12), add it up, and divide. That's the whole calculation and this page does it as you type.

What's a good overhead rate for a subcontractor?

9 to 13 percent is the healthy range for a well run commercial subcontractor. Most subcontractors are somewhere between 25 and 42 percent once owner compensation and equipment are counted honestly. Almost everybody bids around 10 percent. The distance between the 10 in the bid and the real number is the single most common reason a busy year produces no profit.

Do I need the workbook, or is the page enough?

The page is enough to get your rate. It takes one figure per section, which is about two minutes, and the arithmetic is identical to the workbook's. The workbook goes line by line across all 55 cost items, which is what you want when you're doing this properly once a year rather than checking a number today, and it's the file you paste into the 13 week cash flow forecast later. The same form sends both workbooks.

Is field labor part of overhead?

No. Field labor exists only when a job is active, so it's a direct cost and it belongs on the job. The one that splits is supervision: a foreman or superintendent who is on a job most of the time belongs to the job, and one who is shared across the company or sits idle between jobs belongs partly here. Split that person by real utilization rather than putting the whole salary in one place.

What gets left out most often?

Owner compensation at market rate, which is what it would cost to hire somebody to do what you do. Leaving it out understates the rate by four to seven points on most companies in the $1M to $12M range. After that it's equipment: fuel, routine maintenance, registration and the mechanic, all sitting in overhead when they belong on a job at an hourly rate. That second one is why an overhead percentage climbs every year with no line item to blame.

Do you keep the numbers I type in?

No. The arithmetic happens in your browser and the cost figures are never sent anywhere. The form sends who you are and your email so the workbook can be sent to you, and nothing else. Reload the page and the numbers are gone.

Josh Luebker

FRACTIONAL CFO · THE CONSTRUCTION CFO

Former commercial project manager and master electrician: 150+ projects worth $2.1B combined, from $50,000 to $300M. Now fractional CFO to commercial subcontractors.

About Josh | LinkedIn

YOUR REAL OVERHEAD RATE.

9 TO 13 IS HEALTHY. 10 IS THE MYTH.

THE RATE IS STEP ONE OF TWO.

OVERHEAD, ANSWERED.

IS YOUR REAL RATE IN YOUR BIDS?