Calculate Your Overhead Rate

	Add all firm expenses EXCEPT direct project labor, project direct expenses and discretionary distributions of profit and taxes (a). $
	Divide the total operating expenses by your direct project labor (b). $
	The resulting percentage is your overhead rate. %
(a) Discretionary expenses excluding bonus/incentives, discretionary retirement plan contributions and non operating expenses (such as sale of fixed assets).
(b) Direct labor dollars are those payroll dollars charged directly to a client project, whether billed or not billed. The overall median overhead rate from the 2008 PSMJ A/E Financial Performance Survey is 159.7%. How does your firm compare?
To learn more about typical overhead rates in the A/E industry and hundreds of other financial indicators, purchase the 2008 PSMJ A/E Financial Performance Survey.