Head office overheads
According to The Code of Estimating Practice, seventh edition, published by the Chartered Institute of Building (CIOB) in 2009, head office overheads are:
The incidental costs of running a business as a whole. They are ‘indirect costs’ that cannot be directly allocated to production, as opposed to ‘direct costs’ which are the costs of production. Among other things, overheads may include rent, rates, director’s salaries, pension fund contributions and auditor’s fees. In accountancy, head office overheads are generally referred to as ‘administrative expenses’ whereas the direct costs of production are referred to as ‘cost of sales’. The apportionment of head office overheads to individual projects or as a percentage of company turnover is decided by management as part of a management policy. |
--CIOB
NB The Society of Construction Law Delay and Disruption Protocol, 2nd edition, February 2017, published by the Society of Construction Law (UK) defines head office overheads in very similar terms as:
...the incidental costs of running the Contractor’s business as a whole and include indirect costs which cannot be directly allocated to production, as opposed to direct costs which are the costs of production. Amongst other things, these overheads may include such things as rent, rates, directors’ salaries, pension fund contributions and auditors’ fees. In accountancy terms, head office overheads are generally referred to as administrative expenses, whereas the direct costs of production are referred to as costs of sales. |
See also: How to calculate head office overheads and profit.
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
A sun, tide, mass or scratch dial.
A brief description of time in the sun.
ICE Trustee Board update June 2022
Given by ICE President Ed McCann.
Artificial intelligence and project management
Two new research reports published by APM.
Association for Project Management membership offer
50% off APM Associate membership for Designing Buildings users.
Building safety, a shifting landscape for professionals
A commentary from the insurance perspective.
In brief with further links.
Walter Segal: self-built architect
A definitive book on a pioneer of green architecture.
Funding for heritage on the high street
Using heritage as a catalyst for reviving historic centres.
Commonwealth Heads of Government Meeting update.
Declaration prioritising sustainable urbanisation adopted.
A small hidden, often distant but key building component.
Some brief words about the actuator.
CIAT Chief Executive steps down.
After 34 years at the Institute.
Volunteer opportunity launched by the ICE
To support the next generation of engineers.
Provisional findings show illegal cartels in the industry.
CIAT reporting from the Competition and Markets Authority.
Making sustainable construction number one priority.
The future of construction report.
Interview with ECA CEO.
Many provisions came into force on June 28, 2022.
With room to expand.
An information packed session at the BSRIA conference.
Refurbishment, Energy Efficiency, Indoor air and process.
Create a profile, write informed product articles and share.
Aluminium Composite Panels (ACP) is one example.
We are indeed now 10 years old, so go on and be bold !
Write about something you know, help us build and grow !