> ## Documentation Index
> Fetch the complete documentation index at: https://usepike.com/docs/llms.txt
> Use this file to discover all available pages before exploring further.
# Overhead costs
> Spread shared workspace expenses across members and load them into profitability cost.
Overhead costs let you spread shared workspace expenses — rent, software, equipment, admin, and similar — across the people who carry them. Pike converts each person's share into an hourly amount and adds it to their employment cost when calculating profitability.
## Why overhead exists
Salary or contract cost alone understates what an hour of work actually costs. Overhead closes that gap by loading shared recurring spend onto the hourly cost rate used in finance reports.
For how loaded hourly cost flows into earnings, cost, and profit, see [Profitability](/finance/profitability).
## Where to manage overhead
Go to **Finance → Settings → Overhead costs**.
| Action | Who can do it |
| ------------------------------------- | ------------------------ |
| View overhead line items | Admins and finance users |
| Create, edit, activate, or deactivate | Workspace admins only |
## What an overhead line item contains
Each line item has:
| Field | Description |
| ------------------------- | ---------------------------------------------------------------------------------- |
| **Name** | Label shown in finance settings (e.g. "Office rent", "Figma licences") |
| **Amount** | Recurring cost in the workspace currency |
| **Frequency** | How often the cost recurs: weekly, monthly, quarterly, or yearly |
| **Members** | One or more workspace members the cost applies to. At least one member is required |
| **Start date** (optional) | First date the cost is in effect |
| **End date** (optional) | Last date the cost is in effect |
| **Active / inactive** | Inactive items are ignored in calculations |
Only **active, non-virtual workspace members** can be assigned. Inactive or virtual members cannot be selected.
## How costs are allocated
Pike uses a simple equal split:
1. Convert the line item amount to a **monthly equivalent** based on frequency.
2. Divide that monthly amount **equally** across all assigned members.
3. Convert each member's monthly share into an **hourly overhead rate**.
4. Add that hourly overhead to the member's employment hourly cost in profitability.
### Frequency → monthly conversion
| Frequency | Monthly equivalent |
| --------- | ------------------ |
| Weekly | Amount × 12 ÷ 52 |
| Monthly | Amount |
| Quarterly | Amount ÷ 3 |
| Yearly | Amount ÷ 12 |
### Monthly share → hourly overhead
Each member's hourly overhead is:
```
hourly overhead = member monthly share ÷ monthly working hours
```
**Monthly working hours** come from the member's **employment contract**:
* Pike reads `hours per week` from the member's effective contract.
* It converts that to monthly hours using business days in the month:\
`(business days in month ÷ 5) × hours per week`
* Weekends are excluded. Public holidays are not subtracted in this calculation.
Members assigned to overhead must have an effective contract with **hours per week** greater than zero. Pike rejects assignments for members without one.
#### Example
* Overhead: **£4,000 / month**, split across **4 members** → **£1,000 / month** each
* Member A: full-time contract, 37.5 h/week → \~165 working hours in a typical month\
→ hourly overhead ≈ **£6.06 / h**
* Member B: part-time contract, 20 h/week → \~88 working hours\
→ hourly overhead ≈ **£11.36 / h**
Same monthly share, different contracted hours → different hourly overhead. That is intentional: equal monthly burden, higher hourly load for people who work fewer hours.
Before creating overhead items, set **employment contracts** for every
assigned member — including **hours per week**. Overhead hourly rates depend
on contracted capacity, so part-time and full-time members with the same
monthly share will show different loaded costs per hour.
## When an overhead item applies
A line item contributes to calculations only when **all** of the following are true:
* It is **active**
* Today (or the calculation date) is on or after **start date**, if set
* Today is on or before **end date**, if set
* The member is in the item's **assigned members** list
* The item has at least one assigned member
Items with no members never apply.
## What overhead affects
Overhead feeds into **cost** on profitability views:
* **Actual profitability** (time-based and invoice-based revenue methods)
* **Planned profitability** (from resource allocations)
It does **not** change billable rates, invoice amounts, or task rates. It only increases the internal **cost** side of the profit calculation.
## Cost snapshots
When an overhead item is created or updated, Pike recalculates hourly cost snapshots for every affected member. Snapshots record, at that point in time:
* Base hourly employment cost
* Hourly overhead
* Total loaded hourly cost
Snapshots are append-only. They support historical cost reconstruction when overhead or contracts change later.
## Relationship to employment contracts
Overhead and employment cost are separate inputs that combine at the hourly level:
| Input | Source | Used for |
| ---------------------------- | ----------------------------------------------------------------------- | -------------------------------- |
| **Base hourly cost** | Member employment contract (salary / rate + frequency + hours per week) | Labor cost in profitability |
| **Hourly overhead** | Assigned overhead line items | Added on top of base hourly cost |
| **Total loaded hourly cost** | Base + overhead | Cost per hour in profitability |
For accurate results, keep member **contracts** up to date (cost amount, frequency, hours per week, effective date) and assign overhead to the correct members.
Configure member contracts, capacity, and hourly employment cost.
## Setup checklist
1. Set employment **contracts** for members (cost, frequency, hours per week).
2. Create overhead line items in **Finance → Settings**.
3. Assign members to each item (each must have an effective contract).
4. Review profitability on **Finance → Overview** or a project's **Finance** tab.
## Related documentation
How loaded hourly cost flows into earnings, cost, and profit.
Workspace contacts, products, invoice defaults, and overhead line items.