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Calculating Your Markup, Part 1

General Contractor's Markup is not included in any costs in Get-A-Quote.net. Markup includes overhead and profit and may be the most difficult item to estimate. 

A 20% markup is about the minimum markup used by general contractors handling residential construction. Apply markup to all costs, including both subcontract items and work done by your own crews.

To realize a markup of 20% on the contract price, add 25% to job costs. See the example in the next section. 

Calculating Markup  Markup is the amount added to an estimate after all job costs have been accounted for: labor and materials, fringe benefits, job fees, payroll taxes and insurance, permits, bonds, job site supervision and similar job-related expenses. Markup includes the following components:

Contingency (allowance for unknown and unforeseen  conditions)

  • Varies widely from job to job, typically 2%

Overhead (office, administrative and general business expense)

  • Typical overhead expense 10%

Profit (return on the money invested in the business)

  • Typical profit for residential construction 8%

Minimum markup is 20%. Add 25% to the total job cost to get a 20% markup on the job. See the example in the next section

< Equipment Costs | Calculating Your Markup, Part 2 >

 

 

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