Overhead Rate = Overhead Costs / Sales. Let’s say your business had $5,000 in overhead costs last month and $45,000 in sales. $5,000 / $45,000 = .11 or 11%. In terms of dollars, your business spends 11 cents on overhead for every dollar it makes. The smaller your overhead rate, the bigger your net income. Keep track of your small business’s Variable overhead costs are overhead costs that vary in proportion to the amount of production. For a small construction company, variable overhead mostly relates to hourly indirect labor costs, supplies and utilities. Common variable overhead utilities costs include electricity, gas and telecommunications expenses. by a corporation in doing business. The overhead rate was defined as over-head costs divided by direct labor costs. Although overhead as it is defined in this report is a simplification of how overhead is determined within the corporate sector, the definitions of overhead rates and costs which are used are consistent with the concepts