Free cost-allocation tool
Overhead Allocation Calculator
Assign indirect business costs to a job, product or department and see the fully loaded cost, overhead rate and margin after allocation.
Simple calculator
Updates live
Allocate one overhead pool
Overhead pool
Allocation driver
Entity economics
Allocation formula
Allocated overhead = Total overhead × (entity driver ÷ companywide driver).
Advanced calculator
6 cost pools
Allocate overhead by activity
Entity economics
Facility overhead → square footage
Administrative overhead → labor hours
Software & IT → headcount
Equipment & depreciation → machine hours
Insurance & professional → direct cost
Other overhead → revenue
Profitability target
Activity-based allocation
Each overhead pool uses a driver intended to better reflect how that cost is consumed instead of forcing every indirect cost through one allocation basis.
Cost-pool detail
Driver-based allocation
Overhead allocation by pool
| Cost pool | Allocation driver | Pool amount | Entity share | Allocated overhead | Allocation rate |
|---|
Method sensitivity
Useful for comparing allocation methods
If all overhead used one driver
| Single allocation method | Entity share | Overhead allocated | Fully loaded cost | Margin after overhead | Difference vs activity-based |
|---|
Profitability translation
Current allocation
Cost and pricing implications
Direct cost$30,000
Allocated overhead$12,240
Fully loaded cost$42,240
Current revenue$60,000
Current profit$17,760
Revenue for target margin$56,320
Reading the result
Overhead allocation changes which jobs, products and departments appear profitable.
Indirect costs such as rent, administration, software, insurance and equipment still have to be recovered even though they cannot always be traced directly to one sale. An allocation method assigns those costs using a measurable driver such as labor hours, headcount or revenue.
A single allocation base is simple, but it can distort costs when different overhead pools are caused by different activities. The Advanced model uses multiple drivers so facility costs can follow square footage while IT follows headcount and equipment follows machine usage.
Allocation rateTotal cost pool divided by the companywide quantity of the selected allocation driver.
Allocated overheadThe entity’s share of an indirect cost pool based on its share of the driver.
Fully loaded costDirect cost plus allocated overhead, useful for pricing and profitability decisions.