Legal Definitions - overhead

Definition: Overhead refers to the expenses that a business incurs in its day-to-day operations, such as rent, utilities, and salaries of support staff. These expenses cannot be directly attributed to a specific product or service.

Examples: Examples of overhead expenses include:

• Rent for the office space
• Utility bills, such as electricity and water
• Salaries of administrative staff, such as receptionists and accountants
• Office supplies, such as paper and ink cartridges

These expenses are necessary for the business to function, but they do not directly contribute to the production of goods or services. For example, the rent paid for an office space is an overhead expense because it is not directly related to the production of a specific product or service.