In business, overhead or overhead expense refers to an ongoing expense of operating a business; it is also known as an operating expense.Overheads are the expenditure which cannot be conveniently traced to or identified with any particular cost unit.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.verheads are the expenditure which cannot be conveniently traced to or identified with any particular cost unit. 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.