OVERHEAD GUIDE
What expenses should I include in my small-business overhead?
Short answer: overhead usually includes recurring costs the business must pay whether or not one specific job happens. Direct costs are expenses caused by a particular customer job.
Common overhead categories
- Business insurance
- Vehicle payments and general vehicle costs
- Office, shop or storage rent
- Phone and internet
- Software subscriptions
- Bookkeeping and administrative expenses
- Advertising and general marketing
- Licenses and recurring professional fees
- General tools and equipment costs
What is usually a direct job cost?
Materials bought for one job, subcontractors used for one job, permits, special rentals, disposal fees and job-specific delivery charges are commonly treated separately so you can see what each job actually consumed.
Avoid counting the same expense twice
If you already include an expense as a direct cost in every estimate, do not also bury the same amount inside overhead. Consistent categories matter more than trying to make the bookkeeping vocabulary perfect.
Why overhead changes your minimum price
Your overhead has to be recovered from the productive work you sell. When overhead rises or productive capacity falls, the amount each job must contribute also rises.
Use your own numbers
JJL Business Tools turns these ideas into practical targets using your actual costs, time and income goals.
Use the Overhead Calculator