Which site and overhead costs belong to each job

Which indirect costs a contractor should charge to each job, which stay in head-office overheads, and how to allocate shared costs consistently.

By Achekam · 11 October 2026 · 4 min read · For Construction businesses in South Africa, Nigeria, Kenya

Ask a contractor what a job cost and the first answer is usually materials, labour and subcontractors. Those are the easy part. The harder part is everything else: the site agent who runs three sites, the TLB hired for a month and shared between two jobs, the contract works insurance, the site office container, and the bookkeeper at head office who processes every invoice. Some of it belongs to the job. Some of it does not. Getting the split wrong makes good jobs look bad, bad jobs look acceptable, and the next tender priced on the wrong numbers.

This article explains which indirect costs belong on a construction job, which stay at head office, and how to allocate shared costs the same way every month.

A job number for every project

AccountingTools describes construction accounting as a form of project accounting in which a separate job is set up for each construction project and costs are coded to that job number as they are incurred. The principle is simple: if the cost is not attached to the job when it happens, nobody will reliably attach it later.

That applies to indirect costs as much as direct ones. A plant hire invoice that covers two sites should be split between them when it is captured, not left in a general account to be argued about at year end.

AccountingTools' overview of construction accounting explains how job costs, change orders and revenue recognition fit together.

Supervision, plant and insurance belong on the job

AccountingTools notes that indirect costs such as supervision, equipment rentals, support costs and insurance are charged to construction projects. They are not materials or labour that end up in the structure, but they exist because the job exists.

Typical job indirect costs:

• Supervision. The site agent, foreman and safety officer for the time spent on that site.
• Plant and equipment. Hired plant, and a charge for owned plant used on the job.
• Site establishment. Site offices, ablutions, fencing, temporary water and power.
• Insurance. Contract works and other cover taken out for that project.
• Site support. Security, cleaning and small tools consumed on site.

The labour side follows the same logic. AccountingTools explains that labour directly traceable to a job is charged to that job as direct labour, while other labour is recorded in an overhead cost pool as indirect labour and allocated to open jobs. A bricklayer on site is direct labour. A supervisor who splits the week between sites is indirect, and needs an allocation.

Administration stays out unless the client agrees

AccountingTools adds an important limit: administrative costs are not charged to construction projects unless the customer allows it. The bookkeeper, head-office rent, the estimator's salary and the managing director's car are costs of running the business, not of running a particular job.

This matters most on contracts where costs are reimbursed or audited. If the contract allows a head-office overhead recovery, it will usually say how much and on what basis. If it does not, charging administration to the job will be challenged, and should be.

Accounts and budgets in Achekam

In Achekam, costs are tracked through the ledger's accounts. Each business has its own double-entry ledger with a standard chart of accounts created when the books first open, and accounts can be added, renamed or switched off. A contractor can therefore add accounts for each significant job's indirect costs, such as supervision, plant hire and site establishment for that job, alongside its general overhead accounts.

A business can set a budget per account and period and compare it with actual figures from its ledger. Set the job's indirect cost budget from the tender, account by account, and the comparison shows month by month where the job is drifting.

Approved purchase orders count as committed spend against budgets per expense account and period. The screen shows the budget, what has been spent, what is committed and what is available, and flags over-committed lines without blocking the purchase. On a job, that means a plant hire order raised this month shows against the plant budget before the invoice arrives, which is often the earliest warning a contractor gets.

Allocating shared costs the same way every month

Some costs cannot be traced to one job: the contracts manager overseeing all sites, a crane shared across projects, the company's general liability cover. They have to be allocated.

AccountingTools stresses that the same types of cost should be charged to overhead in every period and applied to jobs consistently, so that overhead allocations can be explained from month to month. The basis matters less than sticking to it. Common choices:

• supervisor time by site, from timesheets;
• shared plant by days on each site, from the plant register;
• general site costs by direct labour hours or direct cost on each job.

Write the basis down, apply it monthly, and post the allocation as a manual journal from the shared account to each job's accounts; Achekam refuses one that does not balance or is dated in a closed month. If the basis changes, record why and from which month.

For setting up accounts that make this possible, see a chart of accounts for a contractor; for the plant question specifically, read plant: owned or hired.

A job's real cost includes the site agent, the TLB and the insurance. Charging them consistently is how a contractor learns which jobs actually make money.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.