Overhead is that part of an organization's intake or expenditure which goes to simply maintaining the organization, and not to profit, suppliers, charities, etc. Example: If the Red Cross takes in $50 million in donations and distributes $20 million to various charities, then it has $30 million in overhead. This is not an outrageous percentage for a non-profit, by the way. Another example: A manufacturing business that makes $100 per day and spends $45 on raw materials, tooling, maintenance, manufacturing labor etc. and keeps $25 in profit probably has $30 of daily overhead. This would go to places like the boss's secretary's salary, coffee for the break room, toilet paper for the john, etc. etc.