Overhead
EVM Terms
Reviewed by forProject Technology - updated Sep 2026
Quick definition: Overhead is a category of Indirect Cost covering shared costs that support a particular function, facility, or business unit rather than any single project.
Overhead is one of the indirect cost pools, alongside General & Administrative. It typically gathers the costs of running a specific function or facility — supervision, equipment, utilities, fringe benefits — while G&A covers company-wide administration. Because overhead can't be tied to a single contract or Work Package, it's allocated across the projects that benefit from it using an agreed-upon rate, rather than charged as a Direct Cost.
Why it matters
Correctly separating overhead from direct costs matters for accurate project budgeting and for calculating the true, fully-burdened project costs used in an Estimate at Completion.
Also known as
N/A
Used in
Elements of Cost
See also
Indirect Costs
Direct Costs
General & Administrative
Elements of Cost
Forward Pricing Rates Agreement
FAQ
Is Overhead the same thing as Indirect Costs?
No. Indirect Costs is the umbrella term; Overhead is one category within it, and General & Administrative is another.
How is Overhead different from General & Administrative costs?
Both are indirect, but Overhead typically supports a specific business unit or function, while General & Administrative (G&A) costs support the organization as a whole.
Definition maintained by forProject Technology.
© 2026 forProject Technology, Inc.
© 2026 forProject Technology, Inc.
