Overhead is the continuing cost of operating a business, not including labor.
Overhead refers to the ongoing expenses that a business must pay aside from labor or costs directly related to labor. Most overhead costs are fixed costs, meaning that these expenses remain constant and do not change depending on business performance. An example of a common fixed overhead cost is rent. Rent is a business expense not related to labor and is ongoing regardless of business performance. Overhead costs don’t necessarily have to be fixed, they can also be semi-variable. A semi-variable cost is a cost that will occur no matter what, but the value will change depending on certain factors. A common example of a semi-variable overhead cost is the cost of electricity. The electric company will charge the business a base (fixed) cost each month, but the amount the business is charged on top of the base depends on the amount of electricity used, making it subject to change, thus semi-variable. Calculating your overhead cost is extremely important – mainly so you can decide how much you need to charge for your product of service in order to turn a profit and build a healthy business.
{Microdata type="HowTo" id="9950"}Overhead refers to the ongoing expenses not directly tied to a specific project, product, or lesson—such as rent, utilities, or administrative salaries. In education, it often means general costs required to run a school or classroom.
Knowing about overhead helps teachers manage classroom budgets and resources efficiently, ensuring funding is used for both direct teaching needs and essential support services.
Common overhead costs in schools include building maintenance, electricity, administrative staff salaries, and supplies used by all classrooms, not just one.
Direct costs are expenses tied to a specific activity (like textbooks for a class), while overhead covers general expenses needed for overall operation, such as custodial services or district administration.
Overhead can take up a significant portion of a school’s budget, affecting how much money is available for direct educational programs, teacher salaries, and extracurricular activities.