Pre-loaded with general contractor trade overhead defaults. Enter your job costs — get your exact bid price and profit margin.
For cost-plus contracts, the agreed markup (typically 12–18%) must still cover your overhead. Use this calculator to verify your markup covers all overhead before agreeing to a cost-plus arrangement with a client.
General contractors operate with more complex pricing structures than specialty trade contractors because a GC bid typically includes both self-performed work and subcontracted work — each priced differently. Industry benchmarks put GC markup at 15–25% on total direct costs, but this number is deceptive: it's the blended rate across self-performed labor (higher markup), materials (medium markup), and subcontractors (lower markup). The net margin after all overhead typically runs 5–10% for well-run GC operations.
The Construction Financial Management Association reports average pre-tax net profit for construction companies is 1.4–2.4% — which means most GCs are significantly underpricing. If your net margin is consistently below 5%, either your overhead is too high or your markup is too low. This calculator helps you identify which problem you're dealing with by making overhead recovery explicit in every bid.
GCs typically apply 10–15% markup on subcontractor costs. This markup compensates for: coordinating and scheduling subs, managing the prime contract risk (you guarantee the sub's work to the owner), handling sub invoices and cash flow, providing supervision and quality oversight, and carrying the lien liability if a sub doesn't pay their suppliers. On large commercial projects where subcontracted work is 80%+ of total cost, some GCs negotiate a flat management fee rather than a percentage markup.
| Project Type | Typical Markup | Notes |
|---|---|---|
| Custom residential new build | 20–30% | Design complexity, client management, warranty |
| Residential remodel | 25–35% | Hidden conditions, occupied space, change orders |
| Light commercial TI | 15–22% | Defined scope, competitive bidding |
| Large commercial | 10–18% | Volume, bonds required, thin but reliable |
| Design-build | 20–30% | Design services, coordination premium |
| Government / public works | 8–15% | Disclosed costs, prevailing wage, compliance |
GC margins are structurally thin because the business model is fundamentally a management and risk function, not a production function. You're being paid to coordinate, manage risk, guarantee outcomes, and deliver a finished product — not primarily to swing a hammer. The risk is that clients see the GC as a middleman and push back on markup. The defense is demonstrating value: professional estimation, tight scheduling, quality control, warranty, and the management bandwidth to handle problems without burdening the owner.
The most effective way to protect GC margin is through rigorous scope definition, detailed contracts with clear change-order procedures, and disciplined overhead management. Change orders — properly priced and executed — are one of the most important margin protection tools available to a GC. Every scope change that goes unbilled directly reduces your project margin.