Overhead recovery

Overhead recovery is building the cost of running the business, such as rent, insurance, software and office pay, into the rate you charge for each billable hour, so the jobs pay for the shop as well as the work.

Example

Say overhead is $12,000 a month and you have 3 technicians who each bill 30 hours a week. That is 3 x 30 x 52 / 12 = 390 billable hours a month. Overhead per billable hour is $12,000 / 390 = $30.77. A job priced only on wages and parts leaves that $30.77 an hour uncovered.

Work out yours with the break-even rate calculator. Overhead plus wages gives your break-even rate.