Contractor economics
Contractor Overhead Recovery Calculator
Convert a known business overhead pool into a transparent recovery rate using productive hours, billable hours, pre-tax revenue, direct labor cost or direct job cost—without mixing overhead with profit.
Recover a known business overhead pool
Choose one deliberate denominator. ProjectFigures does not recommend a “best” overhead rate.
Business overhead
Recover a known indirect cost pool without calling it profit.
Business overhead covers indirect operating costs that are not already assigned to one employee or one project. Examples may include office/admin payroll, rent, general insurance, software, utilities, accounting, marketing and general fleet costs. The calculator starts with the overhead pool you supply; it does not estimate or classify those expenses.
Keep cost layers separate
Overhead is not labor burden, direct project cost or profit.
Employee wages, employer payroll costs, benefits and paid non-productive time belong in true labor cost when you model them there. Materials, project labor, subcontractors, rented equipment, permits, delivery and other project-specific costs belong in direct job cost. Repeating those costs inside business overhead double counts them.
Hours-based recovery
Productive hours and billable hours are separate denominators.
Productive-hour recovery divides the overhead pool by productive field-labor hours. Billable-hour recovery divides the same kind of pool by billable hours. Either result is a monetary recovery rate per matching hour—not a percentage and not employee labor cost.
Revenue basis
A revenue percentage is not a markup percentage on cost.
Revenue recovery divides overhead by pre-tax customer revenue. If overhead is 150,000 and comparable pre-tax revenue is 1,000,000, the relationship is 15% of revenue. Applying 15% of revenue and adding 15% markup to cost are different operations; this calculator does not turn one into the other or create a circular selling-price formula.
Cost-based recovery
Direct labor cost and direct job cost produce different ratios.
Direct-labor-cost recovery compares overhead with true direct labor cost. Direct-job-cost recovery compares overhead with the full selected direct project cost pool. Only the direct-job-cost percentage naturally matches Job Pricing’s percent-of-direct-job-cost overhead mode. The other ratio is never silently relabeled.
Period consistency
Monthly goes with monthly; annual goes with annual.
Use company-level overhead and denominator values from the same period. For example, 10,000 monthly overhead divided by 500 monthly productive hours and 120,000 annual overhead divided by 6,000 annual productive hours both resolve to 20 per productive hour. ProjectFigures does not silently annualize one side of the calculation.
One-job allocation
Apply only the matching job basis.
An optional job basis can resolve a job overhead amount. An hourly rate multiplies only by the matching job hours; a revenue ratio uses job pre-tax revenue; a labor-cost ratio uses job direct labor cost; and a direct-job-cost ratio uses job direct cost. The result is overhead recovery, not profit.
Use a compatible overhead amount or percentage in Contractor Job Pricing →
Use a compatible resolved amount or direct-job-cost percentage in Change Order Pricing →
Tax and accounting boundary
Use your internally consistent pre-tax business basis.
Revenue inputs exclude customer sales tax, VAT or GST collected for government. ProjectFigures does not decide whether an expense is deductible, capital, recoverable for VAT/GST or correctly classified under an accounting standard. This is planning arithmetic, not tax or accounting advice.
FAQ
Contractor overhead recovery questions
Which overhead allocation method should I use?
ProjectFigures does not choose one for you. Use the denominator your business has deliberately selected and can apply consistently. Different business models may monitor overhead against hours, revenue, direct labor cost or direct job cost.
Does overhead recovery include profit?
No. Recovery repays the modeled overhead pool. Profit is a separate pricing layer and should not be hidden inside the recovery rate.
Can I send the result to Contractor Job Pricing?
Yes, when the semantics match. A resolved job overhead amount can transfer as fixed overhead. A direct-job-cost recovery ratio can transfer as a percent of direct job cost. Hourly, revenue and direct-labor-cost rates are never reinterpreted as that percentage.
Does changing currency convert my numbers?
No. USD, GBP, CAD and AUD are labels only. Changing currency never converts your entered overhead, revenue or cost figures.
Overhead allocation arithmetic using your figures — not tax, accounting, bookkeeping or guaranteed-profit advice.