Overhead Cost Calculator | Business Expense Analysis Tool

Overhead Cost Calculator

Calculate and analyze your business overhead costs vs income

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Understanding Overhead Costs

What Are Overhead Costs?

Overhead costs are ongoing business expenses not directly tied to creating a product or service. These are the costs you incur just to keep your business running, regardless of sales volume.

Common Overhead Categories:

  • Fixed Overhead: Rent, insurance, salaries (remain constant)
  • Variable Overhead: Utilities, office supplies (fluctuate with activity)
  • Semi-variable Overhead: Phone bills, internet (fixed + variable components)
  • Administrative Overhead: Accounting, legal, HR services

Managing Overhead Costs

Effective overhead management is crucial for profitability. Here are key strategies:

Overhead Reduction Tips:

  • Go paperless: Reduce printing and storage costs
  • Negotiate contracts: Regularly review service provider contracts
  • Embrace remote work: Reduce office space requirements
  • Energy efficiency: Lower utility bills with smart upgrades
  • Outsource strategically: Convert fixed costs to variable when possible
  • Monitor regularly: Track overhead as percentage of revenue monthly

Overhead Cost Benchmarks

Industry Standards

While overhead ratios vary by industry, these general benchmarks can help you evaluate your business:

Industry Typical Overhead % Target Overhead %
Retail 20-30% 15-25%
Manufacturing 25-35% 20-30%
Professional Services 40-50% 35-45%
Restaurants 30-40% 25-35%

Key Insight

A healthy business typically keeps overhead costs below 35% of revenue. If your overhead exceeds 50%, you likely need to implement cost-cutting measures or increase prices to maintain profitability.

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