Overhead in construction, their definition and structure

Overhead determination

Often, when receiving estimates for construction work, the customer sees an item called "overhead". The question arises about the need to perform this kind of work, as well as the corresponding costs.overhead in constructionHowever, this type of costs allows you to optimally organize the work and ensure its implementation in a timely manner. The value of such costs in the total costs is still uncertain. For example, among such costs are often the costs of garbage collection or brick breaking. On large sites, construction overheads include salaries of administrative staff or various depreciation. It can be concluded about the need for this category of costs to ensure the continuity of the process of construction and installation and commissioning.Overhead costs in construction also directly affect the construction process itself, and also create favorable conditions for its completion. Considered type of expenditure is necessarily included in the price.

Overhead structure

The size and quantity of overhead costs are clearly regulated by the relevant regulatory documents. There are over a hundred such documents, and all of them can be divided into the following main groups:consumption of materials in construction

- Administrative and economic, including the amount of salaries of administrative and construction staff, the costs associated with their maintenance (mobile communications, travel, office equipment upgrades, depreciation, as well as the cost of transfers in banking institutions).

- Overhead costs in construction related to training, professional development and labor protection of workers involved in construction.

- Costs arising in the process of vital activity of construction sites. An example would be the acquisition of new equipment as a substitute for a failed, payment for guarding or renting premises,as well as various inventive and design work.

- Other overhead costs in construction include advertising, intangible property depreciation. This may also include credit rates changed due to various economic factors.

The consumption rates of materials in construction

consumption rates of materials in constructionIn this industry overhead costs are quite strict rationing in its value. In other words, they can occupy a certain place in the overall cost structure and should not exceed 20 percent. Consumption of materials in construction should vary in the range of 12-15%. It is necessary to note the fact that the strict rationing of the internal structure of overhead costs must be carried out both in volume (quantitatively) and qualitatively. So, considering the structure of overhead costs listed above (4 groups), the administrative and economic costs make up 44% of the total amount of expenses, expenses on training - 37.3%, and the vital activity of the construction site is provided by expenses of about 16%.

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