Your overhead rate is the hourly cost of running your shop whether the machine is on or not. Rent, utilities, equipment payments, software, insurance — every fixed and recurring cost that exists regardless of whether you are sewing an order.
This calculator totals your annual overhead costs, divides by your annual production hours, and gives you a single number: your overhead rate per machine hour. That number flows automatically into the Overhead Allocation line of your NNEP Quoting Calculator.
Calculate this once. Update it when your costs change. Every quote you run after that will include it automatically.
The Overhead Allocation line in the Quoting Calculator asks for: overhead rate × machine hours on this order. Most shop owners skip this line because they don't know their overhead rate. When they skip it, every quote understates Production Cost — sometimes by $15–$40 per order.
On 200 orders per year at $20 understatement each, that's $4,000 in Production Cost that disappears from your margin before the order ships.
- Part A: Enter your annual overhead costs. Use actual numbers or your best estimate. You can enter monthly or annual amounts — the calculator converts automatically. Leave blank any line that does not apply to your shop.
- Part B: Enter your annual production hours — the hours your machine actually runs, not total hours you work.
- Your Overhead Rate Per Machine Hour calculates automatically. It also pre-fills into your Quoting Calculator the next time you open it.
Overhead = the cost of the shop running (rent, equipment, software, insurance).
Labor = the cost of people working. Those numbers live in the R — Real Labor section of the Quoting Calculator.
If you include wages here AND in the Real Labor Calculator, you will count that cost twice and overstate your overhead rate on every quote.
| Overhead Cost Item | Monthly ($) | Annual ($) | Effective Annual |
|---|---|---|---|
| Space | |||
| Rent / mortgage (studio, home office, or storage) | $0.00 | ||
| Renter's or business insurance | $0.00 | ||
| Utilities (electric, gas, water — shop portion) | $0.00 | ||
| Internet (shop portion) | $0.00 | ||
| Phone (shop line or business portion) | $0.00 | ||
| Equipment | |||
| Machine lease or loan payment | $0.00 | ||
| Machine maintenance contract / service plan | $0.00 | ||
| Computer / tablet lease or payment | $0.00 | ||
| Other equipment payment (line 1) | $0.00 | ||
| Other equipment payment (line 2) | $0.00 | ||
| Software & Subscriptions | |||
| Embroidery software license / subscription | $0.00 | ||
| Business software (QuickBooks, scheduling, CRM) | $0.00 | ||
| Adobe / Canva / design subscriptions | $0.00 | ||
| Cloud storage / backup | $0.00 | ||
| Other subscription (line 1) | $0.00 | ||
| Supplies & Consumables | |||
| Needle replacement (annual estimate) | $0.00 | ||
| Hoop and frame maintenance / replacement | $0.00 | ||
| Cleaning and maintenance supplies | $0.00 | ||
| Packaging supplies (bags, tissue, boxes) | $0.00 | ||
| Other consumables (line 1) | $0.00 | ||
| Business Costs | |||
| Accounting / bookkeeping fees | $0.00 | ||
| Business licenses and registrations | $0.00 | ||
| Professional memberships (e.g. NNEP) | $0.00 | ||
| Marketing / advertising (fixed, recurring) | $0.00 | ||
| Shipping supplies / labels (standing stock) | $0.00 | ||
| Bank fees / merchant processing fees (monthly avg) | $0.00 | ||
| Vehicle / company auto (payment, insurance, registration) | $0.00 | ||
| Professional development / trade shows / conferences | $0.00 | ||
| Other business cost (line 1) | $0.00 | ||
| Other business cost (line 2) | $0.00 | ||
| Total Annual Overhead Costs | $0.00 | ||
| Average machine hours per day (typical production day) | |
| Production days per week (typical week) | |
| Production weeks per year (subtract vacations and slow periods) | |
| Annual Production Hours (hrs/day × days/wk × weeks/yr) | 0.0 hrs |
How to Use This Number In Your Quote
In the NNEP Quoting Calculator, the Overhead Allocation line reads: overhead rate × machine hours on this order.
Example: If your overhead rate is $8.50 per hour and this order takes 2.5 machine hours: $8.50 × 2.5 = $21.25 overhead allocation for this order.
Most shop owners skip this line because they have never calculated their overhead rate. Now you have. Calculate it once. The Quoting Calculator picks it up automatically from here.