What does overhead rate mean?

The 'overhead' generally refers to the funding that doesn't go directly to research expenses (salaries of researchers, cost of experiments/consumables, etc) but to the supporting expenses (salaries of administrative/support staff; cost of facilities and utilities, equipment depreciation) of services that are neccessary but not directly related to research.

It often is set by university administration to some fixed rate (50% sounds high to me, but it depends on country and research domain) that is taken from all grants and used to fund those 'common' expenses.

In the US, the overheads proposed to federal funding agencies (NSF, NIH, etc) are in my experience always calculated as an additional percentage on top of the total direct costs (salaries plus fringe benefits, travel, etc). So if your total budget for salaries, fringe benefits, and travel is $500k, and your overhead rate is 50%, then your total proposed budget is $750k.

Now, at my US university, the overhead rate is 54.5%, the majority of the budget is salary, and the fringe rate is calculated at 25% of the salaries, so a good rule of thumb for us is that the total budget should be twice the salaries. Now, that also means that you can work backwards from a total allowed budget by dividing by two.