Contractor Overhead Rate Calculator
Calculate your true overhead cost per billable hour. Compare against industry benchmarks to ensure you're pricing jobs profitably and not leaving money on the table.
1Annual Overhead Costs
2Billable Hours & Industry
Standard: 2,000 hrs/yr (40 hrs/week × 50 weeks). Higher hours = lower overhead rate.
Used to show industry benchmarks for comparison.
Enter your overhead costs and billable hours to calculate your overhead rate.
Frequently Asked Questions
What should I include in overhead?
Overhead includes all costs NOT directly tied to a specific job: office rent, software subscriptions, insurance, admin staff, marketing, utilities, and professional development.
What's a good overhead rate?
It varies by industry. Consulting: $45–85/hr. Construction: $35–75/hr. IT: $40–80/hr. Lower is better — it means you have less cost to cover with each billable hour.
How do I lower my overhead rate?
Either reduce overhead costs (negotiate rent, cut software subscriptions) or increase billable hours (higher utilization). Both improve your rate.
Should I include my own salary in overhead?
No. Your salary comes from profit, not overhead. Overhead is the cost of running the business infrastructure.