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
The UK heating industry and the Brexit transition
An overview of the current state of the market.
UEFA guide to renovating football training facilities
Organisation offers best practices for construction and modification.
Heritage on the edge?
Prioritising tax considerations.
Reviewing the Double Diamond Design model
The four D creative process: discover, define, develop and deliver.
National Cyber Security Centre initiative is announced.
The impact of COVID-19 on global HVAC&R markets
Reviewing trends and projections.
Legislation will establish initiatives to move towards net zero.
Status determination statement
How to document contractor employment status.
Social distancing goes high tech
Tech tools to help manage people and space post-pandemic.
Eclectic Edwardian architecture
A style that ranges from mock Tudor to arts and crafts to the 'Wrenaissance'.
Free guide from Secured by Design.
Building Back Better: Circularity
BREEAM strategy for sustainability and the circular economy.
Free tool to improve the construction programming process.