Overhead Rate

Free Overhead Rate calculator with clear step-by-step results.

About Overhead Rate

The overhead rate allocates indirect costs as a percentage of direct labor.

Formula

Overhead rate = overhead ÷ direct labor × 100

Worked example

With the default values below, Overhead Rate returns Overhead Rate of 40.0%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Total overheadminimum 0 $: 80,000 $
Direct labor costsminimum 0 $: 200,000 $

Results

Overhead Rate: 40.0%
Overhead per Dollar of Labor: 0.40
Estimated Total Cost: $280,000.00

Step by step

1Values used
2Formula
3Overhead Rate= 40.0
4Overhead per Dollar of Labor= 0.40
5Estimated Total Cost= $280,000

Assumptions and limits

The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How does this calculator work?