Business Overhead Calculator
Understanding your "nut"—the cost of simply keeping the lights on—is the first step toward profitability in the 2026 US economy.
What is Business Overhead?
In the context of US accounting standards, overhead refers to the ongoing business expenses not directly attributed to creating a product or service. While a carpenter pays for wood (direct cost), they also pay for shop rent and insurance (overhead). In 2026, as remote work and SaaS models dominate, overhead has shifted from heavy real estate to digital infrastructure and cybersecurity insurance.
The Overhead Formula
Monthly Overhead = Σ (Rent + Utilities + Insurance + Admin Labor + Marketing + Software)To find your Overhead Rate, divide this total by your monthly revenue. A healthy rate varies by industry, but keeping this figure below 30% is a common benchmark for service-based businesses in the USA.
Fixed vs. Variable Overhead
1. Fixed Overhead: These costs remain the same regardless of your sales volume. Examples include your office lease in Austin, TX, or your flat-fee legal retainer.
2. Variable Overhead: These fluctuate based on business activity. Think of your cloud computing costs (AWS/Azure) or shipping supplies.
3. Administrative Labor: This is a "hidden" overhead. While your developers or creators produce the value, your virtual assistant or bookkeeper is an overhead expense.
Frequently Asked Questions
Are taxes considered overhead?
Generally, no. In US business accounting, income taxes are calculated on profit *after* expenses. However, property taxes on your office or payroll taxes for administrative staff are considered overhead expenses.
How often should I audit my overhead?
With the rapid inflation and price adjustments seen in 2026, we recommend a quarterly audit. Software "creep"—where unused subscriptions pile up—can silently erode margins by 5-10% annually if left unchecked.
Business Overhead Calculator
Facilities & Utilities
Operations & Labor
Monthly Overhead
Annual Total: $0
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