What is OHP in Construction?

February 20, 2024

The term ohp is often used to describe the sound that people make when they are startled or surprised. However, ohp is also an abbreviation for a number of different things in construction including:

What is OHP in Construction?

Overhead is a percentage of total costs that a company has to pay to keep it running. This includes things like insurance, utility bills, and office expenses. It is important to keep track of overhead because it can significantly affect a construction business’s profit margin. To ensure that projects are profitable, it is important to have accurate projections of a project’s labor and materials costs and include enough money for overhead in the estimate.

One of the most common mistakes that construction businesses make is not tracking their overhead properly. This can lead to errors in calculations, and it can also mean that a construction company is not able to get the maximum profit margin on a project.

Some of the most common costs that are included in overhead are recurring expenses such as rent, insurance, marketing, and legal fees. Other common expenses are indirect labor costs and indirect material costs. Indirect labor costs include administrative and accounting employees that do not work on specific projects, while indirect material costs are items that can’t be easily tracked by job site (like lubricants, screws, nails, and welding supplies).

To calculate the cost of overhead, a construction business must know how much it spends monthly on all of its expenses. From there, it can divide this amount by its monthly revenue to get a percentage that is applicable to a particular project. Then, the construction business can add this percentage to its projected labor and material costs to determine a project’s bid price.

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