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Overhead Cost Calculator for Contractors

Use this free overhead cost calculator to find your true cost per billable hour to run your business. Enter your monthly overhead costs and billable hours — it calculates your cost per hour, per day, and per year, so nothing gets missed from your pricing.

Calculate Your Overhead

Monthly Overhead Costs

Custom Items

Billable Hours

Monthly Overhead$0.00
Annual Overhead$0.00
Overhead per Billable Hour$0.00

TradeToolCalc calculators are for informational and educational purposes only. Results are estimates based on the inputs you provide and should not be relied upon as financial, legal, or professional advice. Always verify figures with a qualified accountant or business advisor before making pricing or business decisions. TradeToolCalc accepts no liability for decisions made based on calculator outputs.

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Overhead Costs — Frequently Asked Questions

Overhead costs are all the expenses your business incurs regardless of whether you complete one job or twenty jobs in a month. Common examples include vehicle loan payments, insurance premiums (liability, vehicle, tools), rent or storage fees, phone and internet bills, accounting or bookkeeping fees, trade memberships, advertising costs, and software subscriptions. They are different from direct costs like materials purchased specifically for a job or labor paid for a particular project.
Add up all your monthly overhead expenses to get a monthly overhead total, then multiply by 12 for an annual figure. Next, estimate how many hours per week you actually bill to clients (not total hours worked — only hours clients pay for). Multiply those weekly billable hours by 52 to get annual billable hours. Finally, divide annual overhead by annual billable hours. The result is the overhead cost you must recover from every hour you charge.
For most sole-trader and small trade businesses in the US, overhead typically represents 15—30% of gross revenue. Businesses with a workshop or yard, multiple vehicles, or employees tend to sit at the higher end of that range. If you find your overhead percentage is above 35%, look for fixed costs you can reduce — renegotiating insurance, refinancing a vehicle, or cutting unused software subscriptions can make a meaningful difference.
It depends on how you structure your pricing. Some contractors treat their desired take-home pay as part of overhead (a fixed cost the business must cover), then add a profit margin on top. Others calculate a minimum hourly rate that covers both overhead and personal income. Either method works, as long as you are consistent. The calculator above focuses on true business overhead — use the Hourly Rate Calculator on this site to include your income target.
Most self-employed Contractors bill between 25 and 35 productive hours per week once you subtract time spent quoting, driving between jobs, admin, shopping for materials, and invoicing. Using 30 hours is a reasonable starting point, but track your actual billable hours for a month to get a real number. The lower your billable hours, the higher each one must contribute to covering your fixed costs — which is why efficiency and scheduling matter as much as your hourly rate.

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