Last edited 05 Jan 2018

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CIOB Institute / association Website

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.


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