What is typically considered project overhead?

Project overhead refers to those expenses that are necessary to manage and support a construction project, but are not directly attributable to a specific task or activity. General site costs encompass various ongoing expenses required to maintain the project site that cannot be directly linked to labor, materials, or equipment. These might include utilities, site security, waste disposal, temporary facilities, and permits.

Labor costs and raw material costs are directly tied to the work being completed, making them direct costs rather than overhead. Equipment expenses, while important, typically fall under direct costs associated with the specific machinery being used for particular tasks on the project. In contrast, general site costs align perfectly with the definition of project overhead, as they support the overall project without directly connecting to specific labor or materials. Thus, identifying general site costs as project overhead is appropriate and reveals an understanding of the broader financial management necessary in construction projects.