Accountants Overhead Cost Calculator
Estimate your accounting practice's monthly and annual overheads and the overhead cost that needs to be recovered through each billable hour.
Overview
Use this calculator to estimate the overhead cost of running an accounting practice and the amount of overhead to recover through each billable hour. Enter regular office, payroll, technology, professional, and other costs, then add your expected billable capacity.
How it works
The calculator adds the monthly costs you enter to produce total monthly overhead. It then multiplies the number of billable accountants by their expected monthly billable hours. Dividing monthly overhead by this billable capacity gives the overhead cost per billable hour. This is a cost-recovery figure, so a charge-out rate would usually also need to account for direct delivery costs, desired profit, and any applicable taxes.
How to use this calculator
- 1Enter your regular monthly office and workspace costs.
- 2Add non-billable payroll, software, insurance, and other operating expenses.
- 3Enter the number of accountants who produce billable work.
- 4Estimate realistic monthly billable hours for each accountant.
- 5Review the overhead cost per billable hour alongside your monthly and annual totals.
Example Calculation
Monthly office rent
$2,500
Monthly support and admin payroll
$12,000
Monthly software and technology
$1,000
Monthly professional fees and insurance
$750
Other monthly overheads
$750
Number of billable accountants
4
Billable hours per accountant per month
100
Overhead cost per billable hour
$42.50
With monthly overhead of 17,000 and 400 billable hours per month, the practice needs to recover 42.50 in overhead from each billable hour. Annual overhead is estimated at 204,000.
Frequently asked questions
What counts as overhead in an accounting practice?
Overhead generally includes operating costs that are not directly tied to one client engagement, such as rent, support payroll, software, insurance, subscriptions, utilities, and marketing.
Should partner or accountant salaries be included as overhead?
Include pay for non-billable roles in overhead. Direct costs of billable accountants can be added separately when setting a full charge-out rate, unless you choose to include them in the costs entered.
How many billable hours should an accountant have each month?
Use expected chargeable client time after allowing for holidays, training, administration, internal meetings, business development, and unbilled work. The appropriate figure varies by role and practice.
Does the hourly overhead cost equal my billing rate?
No. It shows the overhead amount to recover per billable hour. A billing rate may also need to cover direct employee costs, partner drawings, profit, risk, and applicable taxes.
Why is my overhead cost per hour high?
The figure rises when monthly costs are high or billable capacity is low. Improving utilisation, reducing recurring costs, or increasing the billable team can change the result.
Can I use this calculator for a remote accounting firm?
Yes. Enter remote-work costs such as software, coworking, home-office allowances, IT support, and subscriptions in the relevant monthly cost fields.
Explore Related Calculators
Assumptions and warnings
Assumptions
- All entered operating costs are recurring monthly costs.
- Billable hours represent realistic client-chargeable time rather than total working hours.
- The hourly result covers overhead only and does not include profit, taxes, or direct billable staff costs unless they are included in the overhead inputs.
- Annual overhead is calculated by multiplying the monthly estimate by 12.
Warnings
- This calculator provides a business planning estimate only and is not financial or accounting advice.
- Review actual costs, utilisation, pricing, and tax obligations before making pricing decisions.