Do I need to account for overheads in my total exposure time when submitting Service Mode OBs?

The total allocated time to your proposal  is the sum of the integration time and all standards operational overheads. The overheads must be estimated properly at the proposal stage in Phase 1. Look also at this article for some details and useful links. 

If you underestimated the overheads at the proposal writing stage, you need to pay for their cost when preparing your observation at Phase 2. Indeed, any underestimation will necessarily imply reducing the exposure time when preparing your observation because your Phase 2 material can not exceed the allocated telescope time. To make sure you respect this rule, check the Execution Time Report function in the p2 tool while preparing your observation.