How to Set Up Overhead Rate

Overhead Rate (hourly)

To help you better calculate your profitability, there is a field in Location Settings where you can enter your overhead costs for each location. This article walks you through calculating the hourly rate with methods available with RepairQ 1.15 

This number is an hourly rate, keeping in mind there are 24 hours in a day. Here is how we recommend you calculate this number:

  1. Add up all of your monthly bills for a location, i.e. rent, utilities, internet, cleaning, etc.
  2. If you have any bills/expenses that are not billed monthly, divide them down to a monthly equivalent.
  3. Add the monthly pay of any salaried employees.
  4. Divide that sum by the total number of hours in a month (730). This number was calculated by:
    1. 24 hours in day, multiplied by 365 days in a year: 8760
    2. Divide that by 12 months: 730
  5. This number is your hourly overhead rate, plug this into the "Overhead Rate" field. We have found somewhere in the vicinity of $10-20 to be the industry average.

By calculating everything with an hourly rate you will be able to monitor break-even/profitability progress down to the current day (you can also view for the week, month, quarter, and year). The system will automatically calculate the rest of the important numbers:

  • total revenue = income + other income
  • total costs = cost of goods + returns & allowances + indirect labor + operating costs(overhead rate)
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