White Paper Excerpt:

For individual trades, Overhead is any additional expense not charged (attributed) directly to the work being performed. Overhead is typically classified as an indirect cost. Profit is formally defined as “the excess of the selling price of goods over cost.”* Profit is typically added to the cost of a construction related job to allow the entity performing the work to grow their company through reinvestment. Xactware Solutions, Inc., an industry leader in providing estimating software, services, and building cost data since 1986, has recognized three categories of overhead. While ultimately, the amount of overhead and profit, as well as how and where it is accounted for within the estimate is left to the discretion of the estimator based upon the conditions of the job and the service provider performing the work, the information listed below should provide general guidelines into how Xactware’s published pricing is created and intended to be used. When Xactware performs market research on unit prices, those surveyed are specifically asked to not include expenses that would be included in the General Overhead and Profit markup percentages (item #1 below).