Overhead Recovery Percentage (Construction)

It shows whether the overhead you built into bids is enough to pay for estimators, PMs, and the yard — not just field crews.

Formal definition

Overhead recovery percentage equals overhead allocated to jobs divided by actual overhead expense, expressed as a percentage. A result near 100% means job burden markup is covering home-office cost.

Why it matters

GCs that under-recover overhead win bids but lose money at the company level.

Where you see it

• Construction company year-end reviews
• CFMA benchmarking surveys
• Surety bond underwriting
• Project executive compensation plans
• Estimating and burden markup training

Worked example

1. Overhead allocated to jobs: $480,000.
2. Actual overhead expense: $500,000.
3. Overhead recovery = ($480,000 ÷ $500,000) × 100 = 96%.
4. Interpretation: Jobs are recovering 96% of actual overhead — slightly under target.

How Business metrics calculates it

Overhead recovered in jobs vs. overhead incurred (construction/trades as labeled).

The range we use for status labels

On Business metrics, the status band for this KPI is roughly 95 to 105. Higher values are generally healthier in this band. Your niche can sit outside it honestly — the label is a prompt to read the coaching, not a certificate.

Where people fool themselves

Overhead recovery of 100% on a year you delayed hiring a PM is not a process; it is a temporary gift. The next hire will break it unless jobs were quoted with that seat in mind.

Run it on your own numbers: the Construction calculator.