• Construction Estimating Reference Book
  • 1. Estimating Basics
  • 2. Construction Estimating Tools
  • 3. General Estimating Guides and Aids
  • 4. Assignment Walkthroughs
  • 5. Construction Materials and Process Index
  • Who Hires Construction Estimators?
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  • Overhead Principles

    Overhead expenses must be taken into account when keeping the books for a business.


    What is Overhead?

    Overhead are cost items that cannot readily be charged to any one project, but represent the cost of operating a construction company. They are incurred regardless of any specific project. There are two types of overhead items, Overhead Expense Items and Job Overhead Items.

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    Overhead Expense Items

    Overhead Expense Items include, but are not limited to, costs in the following categories:

    Office Expenses

    • Rent (If the building is owned then the cost of the building plus a return upon your investment)
    • Electricity
    • Heat
    • Water
    • Office Supplies
    • Postage
    • Insurance
    • Taxes
    • Telephones
    • Office Machines
    • Furnishings


    Exempt Employees (Employees you are exempt from paying overtime)

    • Salaried Employees
    • President
    • Vice President
    • Controller
    • Chief Estimator
    • Human Resource Director

    Non-Exempt Employees (Dept of Labor requires paying overtime when overtime is worked)

    • Hourly employees
    • Secretaries
    • Payroll clerk
    • Accounts payable clerk

    Other Expenses

    • Advertising
    • Trade journals
    • Donations
    • Legal Services
    • Accounting Services
    • Club and Assoc.. dues
    • Travel and Entertainment
    • Cars and Insurance

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    Job Overhead Items

    Job Overhead includes items that can be charged to a specific project, but cannot readily be charge to a specific item of work on the project. They may include, but are not limited to, the following catagories.


    • Superintendent
    • Assistant Superintendent
    • Timekeeper
    • Materials Clerk
    • Foreman

    Temporary Office

    • Heat
    • Lights
    • Equipment

    Temporary Buildings

    • Barricades
    • Enclosures
    • Signals

    Temporary Utilities

    • Power
    • Water
    • Fuel

    Other Items

    • Sanitary Facilities
    • Drinking Water
    • Photographs
    • Surveys
    • Cleanup
    • Insurance
    • Winter Construction

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    This content is provided to you freely by BYU-I Books.

    Access it online or download it at https://books.byui.edu/construction_estimat/overhead_principles.