The Overhead Cost Factor OCF™ is a factor indicator that defines the overhead costs of a company. It helps to understand the actual costs of an employee beyond their salary - including rent, IT, administration and other indirect costs.

For project-based companies such as agencies or consultancies, it is crucial to include all costs in their calculations in order to create realistic hourly rates and profitable quotes. The OCF™ ensures that overheads are allocated to projects fairly and transparently.

You can set the OCF™ under the “Overhead Targeting” tab in OS/ Reports. To do this, open the tab at the bottom of your screen, add your OCF™ factors and get started with your projects.

Basically, the calculation works like this:
Net labor costs + overhead markup = gross labor costs

An OCF™ of 1.0 means that the labor costs of an employee in the project are doubled. A project manager who costs €200 per day internally is therefore assessed at €400 per day in the project - €200 to cover his salary and €200 to finance the overhead.

The overhead markup can be adjusted individually for each department. It is also theoretically possible to set the OCF™ so that only the net labor costs are passed on. However, this means that the entire overhead costs have to be financed from the margin, which is not recommended.

Existing projects retain their original profitability, even if the OCF™ is changed. Only when an employee calculates new items will the updated OCF™ be used.

As a result, project planning remains stable and there are no sudden changes in the current calculations.

The OCF™ can also help to create more budget loyalty within the team. If it is transparent how overhead costs affect project prices, budgets are planned and used more consciously.

The OCF is an indispensable tool for realistic cost calculation. OS/ makes it easy to calculate this factor and integrate it into your planning - for more precise, more profitable projects.