Find your overhead burden rate, applied overhead per unit, and total cost breakdown — free for any business type or industry.
Fill in your cost data on the left to see your overhead rate and full cost breakdown. Results appear instantly when Auto Calculate is on.
The overhead rate — also called the burden rate — tells you how much indirect cost to attach to each unit of your allocation base. Indirect costs are expenses that keep your business running but cannot be traced directly to a single product or job. Examples include rent, utilities, insurance, depreciation, and management salaries. Many of these are fixed costs that stay the same regardless of output — use a fixed cost calculator to separate and total them before entering your overhead figure here.
By spreading those costs across your allocation base (such as direct labor hours or machine hours), you make sure every product or project carries a fair share of overhead. Without this, you could easily underprice jobs or miss the true cost of running your operation.
The overhead rate is used in job costing, process costing, and service billing. Freelancers, contractors, and small business owners also use it to set rates that cover all costs, not just the obvious ones.
The core formula has just two parts:
Example: Overhead = $50,000. Direct labor hours = 10,000. Rate = $5/hr. A job uses 200 hrs, so applied overhead = $1,000. If direct costs are $4,000, total job cost = $5,000.
| Allocation Base | Best For | How to Measure |
|---|---|---|
| Direct Labor Hours | Labor-intensive businesses | Time cards / payroll records |
| Direct Labor Cost | Variable wage environments | Payroll detail |
| Machine Hours | Automated factories | Machine logs / sensors |
| Units Produced | Mass production | Production count |
| Revenue | Service businesses | Sales reports |
| Direct Cost | Simple job costing | Job cost sheets |
| Square Footage | Facility-based allocation | Floor plan records |
Overhead rates vary widely by industry. These are general ranges — your actual rate depends on your cost structure. If you use revenue as your allocation base, a revenue calculator can help you pin down your exact figure before calculating your overhead rate.
| Industry | Typical OH Rate | Common Base |
|---|---|---|
| Manufacturing | 50–150% of DLC | Direct labor cost |
| Construction | 15–25% of job cost | Direct cost |
| Consulting / IT | 100–200% of labor | Labor hours |
| Healthcare | 20–40% of revenue | Revenue |
| Retail | 18–35% of revenue | Revenue |
| Restaurant | 30–50% of revenue | Revenue |
| Freelancer | 40–100% of labor | Billable hours |
Rate per direct labor hour at different overhead totals and annual hours. Currency shown as $.
| Total Overhead | 5,000 hrs | 10,000 hrs | 15,000 hrs | 20,000 hrs | 25,000 hrs | 40,000 hrs |
|---|
Formula: Overhead Rate = Total Overhead ÷ Direct Labor Hours. Currency symbol: $.
How much overhead contributes to the total cost at different direct cost and overhead rate combinations.
| OH Rate / hr | 50 hrs used | 100 hrs used | 200 hrs used | 500 hrs used | OH % (100 hrs, $20/hr direct) |
|---|
Applied OH = Rate × Hours Used. OH % = Applied OH ÷ (Applied OH + Direct Costs) × 100. Direct labor assumed at $20/hr.
Quick lookup for applied overhead when you know the rate and hours consumed per job.
| Hours Used | $3/hr | $5/hr | $8/hr | $10/hr | $15/hr | $20/hr | $25/hr |
|---|
Applied OH = Overhead Rate × Hours Used on the Job.
How overhead cost per unit falls as production volume increases — the fixed cost dilution effect.
| Units Produced | OH = $10,000 | OH = $25,000 | OH = $50,000 | OH = $100,000 | OH = $250,000 |
|---|
OH per Unit = Total Overhead ÷ Units Produced. Higher volume means lower overhead cost per unit.
General overhead rate ranges used across different industries — for reference and comparison only.
| Industry | OH Rate Range | Common Base | Key OH Drivers | Notes |
|---|---|---|---|---|
| 🏭 Light Manufacturing | 50–100% of DLC | Direct labor cost | Rent, utilities, equipment | Rate falls with higher volume |
| 🏗️ Construction | 15–25% of job cost | Total direct cost | Equipment, supervision | Varies by project type |
| 💻 IT / Software | 100–200% of labor | Labor hours | Office, software licenses, HR | High for in-office teams |
| 🏥 Healthcare Clinic | 20–40% of revenue | Revenue | Admin staff, insurance, space | Excludes physician pay |
| 🍽️ Restaurant | 30–50% of revenue | Revenue | Rent, utilities, management | Excludes food & hourly staff |
| 🛒 Retail Store | 18–35% of revenue | Revenue | Rent, marketing, admin | Excludes COGS |
| 🎨 Creative / Agency | 80–150% of labor | Billable hours | Studio, software, management | Target 60%+ utilization |
| 🔧 Auto Repair | 60–120% of labor | Labor hours | Shop space, tools, admin | Billable hour rate must cover |
| 🏠 Freelancer | 40–100% of labor | Billable hours | Home office, software, taxes | Often underestimated |
Ranges are general guidelines only. Your actual rate depends on your specific cost structure. Always calculate your own rate from actual numbers.
Total job cost including overhead vs. selling price needed to hit target profit margin.
| Total Cost | 10% Margin | 15% Margin | 20% Margin | 25% Margin | 30% Margin | 40% Margin |
|---|
Selling Price = Total Cost ÷ (1 − Margin). A 20% margin means 20% of the selling price is profit, not 20% added on top of cost.