01 General Requirements
This cost, usually estimated as a percentage, is calculated by dividing average annual indirect overhead costs by average annual receipts. Temporary increases or decreases in revenue usually won’t affect indirect overhead expense as much as direct overhead expense.
The figures below show typical indirect overhead costs per $1,000 of estimated project costs for a general contractor handling $600,000 to $1,000,000 commercial and industrial projects. Indirect overhead costs vary widely but will be about 8% of gross for most profitable firms. Total indirect overhead cost ($20.00 per $1,000 for materials and $60.00 per $1,000 for labor) appears as 2.0% and 6.0% under Total General Contractor’s Markup at the bottom of this page.
Rent, office supplies, utilities, equipment, advertising, etc. M$ 20.00 20.00
Office salaries and professional fees M$ 60.00 60.00
General Contractor’s indirect overhead M$ 20.00 60.00 80.00
Direct Overhead (job site overhead)
The figures below show typical direct overhead costs per $1,000 of a project’s total estimated costs for a general contractor handling a $600,000 to $1,000,000 job that requires 6 to 9 months for completion. Use these figures for preliminary estimates and to check final bids. Add the cost of mobilization, watchmen, fencing, hoisting, permits, bonds, scaffolding and testing. Total direct overhead cost ($14.30 per $1,000 for materials and $58.70 per $1,000 for labor) appears as 1.4% and 5.9% under Total General Contractor’s Markup at the bottom of this page. These costs can be expected to vary and will usually be lower on larger projects.
Job supervision M$ 44.00 44.00
Truck and fuel for superintendent ($450 per month) M$ 4.50 4.50
Temporary power, light and heat ($250 per month) M$ 2.50 2.50
Temporary water ($100 per month) M$ 1.00 1.00
Cellphone ($50 per month) M$ .50 .50
Job site toilets ($100 per month) M$ 1.00 1.00
Job site office trailer 8' x 30' ($150 per month) M$ 1.50 1.50
Storage bin and tool shed 8' x 24' ($80 per month) M$ .80 .80
Job site cleanup & debris removal ($300 per month) M$ 3.00 3.00
Job signs & first aid equipment ($50 per month) M$ .50 .50
Small tools, supplies ($200 per month) M$ 2.00 2.00
Taxes and insurance on wages (at 24.9%) M$ 11.70 11.70
Total General Contractor’s direct overhead M$ 14.30 58.70 73.00
Total General Contractor’s Markup Typical costs for commercial and industrial projects.
Indirect overhead (home office overhead) % 2.0 6.0 8.0
Direct overhead (job site overhead) % 1.4 5.9 7.3
Contingency (allowance for unknown conditions) % 2.0
Profit (varies widely, mid-range shown) % 7.5
Total General Contractor’s markup % 24.8

The figures above are from a time and money saving construction cost manuals from Craftsman Book Company. Over 50 cost estimating databases are available and all come with the popular National Estimator program.

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