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's Modern Industrial Strategy: A 10 year plan
Previous consultation criticism, current key elements and general support with some persisting reservations.
Building Safety Regulator reforms
New roles, new staff and a new fast track service pave the way for a single construction regulator.
Architectural Technologist CPDs and Communications
CIAT CPD… and how you can do it!
Cooling centres and cool spaces
Managing extreme heat in cities by directing the public to places for heat stress relief and water sources.
Winter gardens: A brief history and warm variations
Extending the season with glass in different forms and terms.
Restoring Great Yarmouth's Winter Gardens
Transforming one of the least sustainable constructions imaginable.
Construction Skills Mission Board launch sector drive
Newly formed government and industry collaboration set strategy for recruiting an additional 100,000 construction workers a year.
New Architects Code comes into effect in September 2025
ARB Architects Code of Conduct and Practice available with ongoing consultation regarding guidance.
Welsh Skills Body (Medr) launches ambitious plan
The new skills body brings together funding and regulation of tertiary education and research for the devolved nation.
Paul Gandy FCIOB announced as next CIOB President
Former Tilbury Douglas CEO takes helm.
UK Infrastructure: A 10 Year Strategy. In brief with reactions
With the National Infrastructure and Service Transformation Authority (NISTA).
Ebenezer Howard: inventor of the garden city. Book review.
The Grenfell Tower fire, eight years on
A time to pause and reflect as Dubai tower block fire reported just before anniversary.
Airtightness Topic Guide BSRIA TG 27/2025
Explaining the basics of airtightness, what it is, why it's important, when it's required and how it's carried out.
Construction contract awards hit lowest point of 2025
Plummeting for second consecutive month, intensifying concerns for housing and infrastructure goals.
Understanding Mental Health in the Built Environment 2025
Examining the state of mental health in construction, shedding light on levels of stress, anxiety and depression.