Two kinds of overhead
Estimators split overhead into two groups. Job overhead belongs to one project. Company overhead belongs to the whole business. They are priced in different ways.
Job overhead
Job overhead is also called general conditions or indirect job cost. You can name each item and price it for the job.
- Project management and supervision time.
- Shop drawings and submittals.
- Permits and fees your trade must pay.
- Bonds and job-specific insurance.
- Freight, storage and unloading.
- Lifts, tools and small equipment.
- Travel, lodging and per diem.
- Cleanup, punch list and closeout documents.
Company overhead
Company overhead is the cost of staying in business. It does not change much when you win or lose one job.
- Office and shop rent.
- Office salaries, including estimators.
- Trucks and equipment not charged to jobs.
- General insurance.
- Software, phones and accounting.
How company overhead gets into a bid
Most companies recover it as a percentage added to job cost. The percentage comes from your own books. Take a year of company overhead and compare it to a year of job cost. Your accountant can help you set it. Do not copy another company's number.
Review the percentage each year. Overhead grows when you add staff, trucks or space. A rate set three years ago may no longer cover the office.
Overhead is not profit
Many bids show one line for overhead and profit. Keep them apart in your own estimate. Overhead is a cost you will pay. Profit is what remains after you pay it. When you cut the combined number on bid day, know which one you are cutting.
Bidding and estimating · Updated 11 Nov 2026