Contractor overhead calculator
What your business costs you for every hour you bill, with the unpaid evenings on quotes and invoices counted in.
Short answer
Add your fixed monthly costs to the value of the hours you spend on office work, then divide by the hours a customer actually pays for. That is the overhead every billed hour has to carry before it earns you anything.
How it works
What this calculator counts
Most overhead calculators add up rent, insurance and the van and stop there. For a small trades business that misses the biggest cost: you. Every evening spent writing quotes, chasing a payment or sorting receipts is an hour you could have billed, and nobody pays you for it.
So this calculator has two parts. Your fixed business costs per month, and your office hours valued at what your hour is worth. Together they are your real overhead.
The formula
- Office time per month = office hours a week × 52 ÷ 12 × what your hour is worth
- Overhead per month = fixed costs + office time
- Billable hours per month = billable hours a week × 52 ÷ 12
- Overhead per billable hour = overhead per month ÷ billable hours per month
With the starting numbers: $1,500 fixed costs, 8 office hours a week at $60, and 30 billable hours a week. Office time is about $2,080 a month, total overhead about $3,580, and each billed hour carries about $27.54 of it. That is 46% of a $60 rate gone before materials, labour or profit.
What to do with the number
If your overhead per hour is a large share of your rate, you have two levers. Charge more, or spend fewer hours on the office. The first is a pricing decision. The second is where most of the money is, because the office hours count twice: once as cost, once as hours you did not bill.
Run the calculator again with half the office hours and see how much the overhead per hour drops. That gap is what a working back office is worth to you each month.
What counts as a fixed cost
Anything you pay whether you work this month or not: insurance, vehicle payments and running costs, phone, software, accountant, licences, tool replacement, storage or a yard. Leave out materials and wages for specific jobs. Those belong in the job price.
Common questions
What if I do not pay myself an hourly rate? Use the rate you charge customers. If you would rather bill an hour than spend it on paperwork, that is what the hour is worth.
Should I count driving between jobs? Count it as office time if nobody pays for it. Many trades lose more hours to driving than to admin.
