My caterer bookkeeping client wants to know the overhead for the past several months. Should I include the fixed wages he pays his chefs and the resulting payroll tax expense?
thanks for any help
I would say so. Unless he only pays his chef for meals created and sold.
Stolen from the internet (author unknown): 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 . There are essentially two types of business overheads: administrative overheads and manufacturing overheads.
For an attributed source which covers more, see: https://www.wallstreetmojo.com/overhead-costs/
But since overhead is normally a concept of cost accounting or managerial accounting and not financial accounting, I think the answer should be: It depends upon what management wants or finds useful in running the business.