Overhead

Overhead is a term used to define the costs that businesses must pay to keep their business up and running. Overhead expenses are all business expenses not directly related to the manufacturing or sale of products or services. Examples of overhead include licenses and government fees, property taxes, rental costs, administrative salaries, accounting and legal expenses, and insurance. Businesses typically use their overhead expenses to determine their net income. Overhead expenses also help corporations determine how much they must sell their product and service offerings for. Successful businesses use pricing strategies that allow them to cover their overhead costs and turn a profit.