Overhead and profit (O&P) is the combined percentage added to estimates to cover indirect business costs and intended profit. Overhead includes rent, insurance, vehicles, tools, and marketing.
In practice
CRM Services' monthly overhead equals $15,000 — each bid includes an O&P percentage to ensure those costs are recovered.
Why it matters
O&P calculations are the foundation of financial health for contracting businesses.
Common questions
What expenses count as overhead?+
Everything that supports the business but isn't tied to a specific job — rent, insurance, vehicles, marketing, admin.
What's a typical O&P percentage?+
10-20% for overhead and 8-15% for profit is common in residential contracting.
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