Overhead Cost = $5,000 Labor Cost = 100. Rate of Overhead = $5,000 / 100 = 50. John compares this to the overhead rate of 52 from last month. He then digs deeper to find that labor productivity has decreased, showing a false decrease in overhead rate per direct labor cost. Your labor burden is the full cost you incur for employees. Overhead expenses are the fixed or indirect costs of running your business, such as administrative and marketing costs. Unlike labor burden, overhead expenses are not directly tied to the level of your production. The overhead is attributed to a product or service on the basis of direct labor hours, machine hours, direct labor cost etc. The overhead absorption rate is calculated to include the overhead in the cost of production of goods and services.