In business, an overhead or overhead expense is an ongoing expense of operating a business. Overheads are the expenditure which cannot be conveniently traced to or identified with any particular revenue unit, unlike operating expenses such as raw material and labor. Overheads cannot be immediately associated with the products or services being offered, and so do not directly generate profits. However, they are still vital to business operations as they provide critical support for the business to carry out profit making activities. One example would be the rent for a factory, which allows workers to manufacture products which can then be sold for a profit. Such expenses are incurred for output generally and not for particular work order; e.g., wages paid to watch and ward staff, heating and lighting expenses of factory, etc. Overheads are an important cost element, alongside direct materials and direct labor.

Overheads are often related to accounting concepts such as fixed costs and indirect costs.

Overhead expenses are all costs on the income statement except for direct labor, direct materials, and direct expenses. Overhead expenses include accounting fees, advertising, insurance, interest, legal fees, labor burden, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.

Business overheads fall into two main categories: administrative overheads and manufacturing overheads.

Administrative overheads include items such as utilities, strategic planning, and various supporting functions. These costs are treated as overheads due to the fact that they are not directly related to any particular function of the organization, nor do they directly result in generating any profits. Instead, these costs simply take on the role of supporting all of the business's other functions.

Charities may refer to their administrative overheads as "core costs".

Universities regularly charge administrative overhead rates on research. In the U.S. the average overhead rate is 52%, which is spent on building operation, administrative salaries and other areas not directly tied to research. Academics have argued against these charges. For example, Benjamin Ginsberg showed how overhead rates are primarily used to subsidize ballooning administrative salaries and building depreciation, neither of which directly benefit research; although it does benefit the administrators that determine university policy in his book The Fall of Faculty. An article written by Joshua Pearce in Science argued that overhead accounting practices hurt science by removing funds from research and discouraging the use of less-expensive open source hardware. He went into detail on the accounting showing how millions were wasted each year on overhead cash grabs by university administrators in ZME Science.

This includes mainly monthly and annual salaries that are agreed upon. They are considered overheads as these costs must be paid regardless of sales and profits of the company. In addition, salary differs from wage as salary is not affected by working hours and time, therefore will remain constant. In particular, this would more commonly apply to more senior staff members as they are typically signed to longer tenure contracts, meaning that their salaries are more commonly predetermined.