How to Calculate Overhead for a Craft Business
Overhead is the cost of keeping the shop running. If it is not in the price, you pay it from profit.
List yearly shop costs
Add software, website, insurance, booth fees, education, tool replacement, samples and a realistic share of utilities. Ignore sunk hobby purchases only if you will not replace them.
Divide that yearly total by the number of items you actually expect to sell — not the number you hope to list. That is a simple overhead per item.
Machine hourly rates are overhead in disguise
Printers, lasers and embroidery machines lose value and need maintenance. An hourly rate on runtime assigns that overhead to the jobs that use the machine, which is fairer than spreading it equally across a $4 sticker and a 12-hour print.