Materials and labour are the costs you can point at on a single job. Everything else still has to be paid: the insurance, the tools, the van, the phone, the ads that bring the next customer in.
If those costs never appear on the estimate, the job looks cheaper than it really is, and the business quietly loses money. Today you put a fair share of those hidden costs onto your estimate as an overhead markup.
Overheads are shared across every job as a percentage markup on the materials-and-labour subtotal. Watch the interactive: a job costing €320 with a 12% overhead markup.
Read the working under the bars. The overhead amount is 12% of €320, which is €38.40. The new running total is €320 + €38.40 = €358.40.
| Concept | Why it matters | Example |
|---|---|---|
| Overheads — running costs not tied to one job (insurance, tools, van, phone, advertising) | If they never appear on the estimate, every job undercharges and the business loses money | Public-liability insurance still costs hundreds of euro a year whether you paint one room or fifty |
| Overhead markup — add a percentage of the materials-and-labour subtotal to cover those running costs | Each job pays a fair share without inventing a fake line for every receipt | €400 subtotal × 12% = €48 overhead; running total €448 |
| 10–15% range — the usual starting band for a small Irish trade, then adjusted to match real costs | The percentage has to be justified from the business, not picked because it sounds neat | A van-heavy trade may sit near 15%; a lighter mobile service may sit near 10% |
Work the interactive with the class. The operation is locked on markup. Change the job cost and the percentage, and watch the overhead amount and the final price update.
First sample job: a bathroom repaint.
Try the overhead at 10%, then 12%, then 15%. For each one, read off the overhead amount and the new running total before you move the slider again.
Then set the job cost to €500 and find the overhead at 12%. Check that it matches €60, with a running total of €560.
Use the same markup interactive on your own job. Set the job cost to the materials-and-labour subtotal you already have from earlier lessons, then choose an overhead percentage between 10% and 15% that fits your work context.
If your subtotal is still rough, use the best figures you have today. The markup method on the interactive still has to be correct.
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