How much do general contractors charge?
How much do general contractors charge?
$50 – $150 average hourly rate
10% – 20% fee percentage markup of construction cost
Average general contractor cost
General contractors charge a 10% to 20% fee percentage of construction costs for large projects and a fixed, daily, or hourly rate for small jobs. Contractor hourly rates are $50 to $150 per hour on average. General contractor pricing depends on the labor and material costs, project size, and location.
| Charge type | Average cost |
|---|---|
| Percentage markup of construction cost | 10% – 20% |
| Hourly rate | $50 – $150 per hour |
| Daily rate | $300 – $500 per day |
General contractor pricing guide
Contractor labor rates vary depending on the project size and type:
| Project | Average project cost | Additional price for GC |
|---|---|---|
| Cost to build a house | $178,000 – $416,000 | $18,000 – $83,000 |
| Home addition cost | $22,500 – $74,000 | $2,200 – $15,000 |
| Cost to remodel a house | $19,800 – $73,200 | $2,000 – $15,000 |
| Bathroom remodel cost | $5,500 – $15,000 | $550 – $3,000 |
| Small bathroom remodel cost | $2,500 – $10,000 | $250 – $2,000 |
| Bathroom addition cost | $18,000 – $47,000 | $1,800 – $9,500 |
| Kitchen remodeling prices | $12,800 – $21,200 | $1,300 – $4,300 |
| Cost to finish a basement | $22,000 – $46,000 | $2,200 – $9,200 |
| Cost to build a garage | $19,600 – $28,200 | $1,900 – $5,700 |
| Cost to build a sunroom | $15,000 – $80,000 | $1,500 – $16,000 |
| Cost to build a pole barn | $4,000 – $35,000 | $400 – $7,000 |
| Drywall installation cost | $8,000 – $30,000 | $800 – $6,000 |
| Cost to build a brick or stone wall | $3,000 – $9,000 | $300 – $1,800 |
| Deck building cost | $4,400 – $10,000 | $440 – $2,000 |
| Concrete patio cost | $1,200 – $4,300 | $120 – $900 |
| Driveway installation cost | $1,700 – $6,900 | $170 – $1,400 |
| Fence installation cost | $1,600 – $3,500 | $160 – $700 |
| Support beam installation cost | $1,200 – $4,200 | $120 – $900 |
| Cost to raise a house | $10,000 – $40,000 | $1,000 – $8,000 |
Contractor fees to build a house
Contractors fees are $18,000 to $83,000 on average to build a house, or 10% to 20% of the total construction budget. A general contractor's fees include overhead, profit, and a markup on materials and labor.
Consider selecting a design-build contractor. The designer and contractor work together from the start, reducing the overall cost and project length.
Contractor fees by type
General contractors typically charge a percentage of the total construction cost but may use a combination of fee structures in their contract:
Percentage of construction costs
Fixed price / lump sum
Cost-Plus
Time & Materials (T&M)
Hourly or daily rate
General contractor fee percentage markup
General contractors charge a fee percentage of 10% to 20% from a markup on subcontractor labor, materials, and the total project cost. The percentage markup may be based on a fixed price or an adjustable amount known as a Cost-Plus agreement.
Fixed cost / lump sum – The contractor estimates the total cost and scope of work up front and must stick to the budget. If cost overruns occur in one part of the project, the contractor must cut expenses in another area to make up the shortfall.
Cost-Plus agreement – The homeowner pays the contractor the construction cost plus a percentage of the cost. A Cost-Plus percentage arrangement favors the contractor rather than the homeowner because the contractor has an incentive to increase the budget wherever possible.
General contractor hourly rate
General contractors charge $50 to $150 per hour. Contractors rarely charge an hourly rate except for pre-construction planning services or small projects.
A contractor may offer a Time and Materials (T&M) agreement that includes an hourly rate for labor plus materials. T&M contracts pose a higher risk for the homeowner unless limits on the total time and cost are established up front.
Contractor builder rates per day
Contractors charge $300 to $500 per day on average for themselves and $150 to $250 per day for subcontractors or laborers. Daily rates are less common than fixed fees and percentage rates.
Pre-construction services contract prices
Pre-construction services cost $150 to $1,000+, depending on the project size. A pre-construction service contract—sometimes called a professional services agreement or design agreement—covers the contractor's planning and cost estimating process.
Many contractors apply some or all of the pre-construction service fee toward the construction cost.
Contractor labor rates
General contractor rates depend on the following factors:
Project size – Total contractor fees for building a home are higher than fees for smaller projects.
Project type – Fees for remodels are higher than for new construction.
Location – Labor and materials typically cost more for a remote building site due to extra transportation time and fuel expenses.
Contractor's experience – An experienced contractor often charges higher fees but has developed a network of business contacts and can draw on a larger pool of subcontractors and laborers.
Markup – The markup on labor and individual materials ranges from 8% to 45%. The contractor builds the markup into the final bid, resulting in a total average markup of 10% to 20%.
Labor – The number and type of subcontractors, tradespersons, and laborers impact the total cost.
Overhead and profit – The contractor's fee covers their costs for staff, operations, marketing, general liability and insurance, taxes, and profit.
Insurance – Contractors must carry liability, builders' risk, workers' compensation, and pollution insurance.
Building permits cost $50 to $2,000+, depending on the project type and size.
General contractors charge for estimates
General contractors charge up to $1,000 for an estimate, depending on the project size and scope.
Contractors typically offer free estimates for small jobs, like installing an electrical circuit or retiling a bathroom floor.
A pre-construction planning consultation costs $150 to $1,000 for large remodeling projects, additions, or building a house. Many contractors apply the consultation fee toward the project cost.
How do general contractors get paid?
Most general contractors get paid as a percentage of the total construction cost. This percentage fee includes a markup on the cost of labor, materials, and supplies. Contractors typically require an upfront deposit with a payment plan throughout the project for work completed.
When do you pay a general contractor?
Most contractors require a deposit of 10% to 25% of the total contract price up front, with the remaining amount paid at specific intervals or after certain milestones, such as after demolition, after framing is completed, or when drywall installation begins.
Many states limit the deposit amount a contractor can charge a homeowner. Check local regulations for more information.
Beware of contractors who ask for more than 50% up front for large projects, as this is often a red flag.
Commercial general contractor fees
General contractor fees for commercial projects are 20% to 25% of the total construction cost. Commercial buildings typically require larger HVAC, plumbing, and electrical systems, heavy construction equipment, and more materials and laborers than residential projects.
General contractor cost vs. a construction manager
A general contractor and construction manager have similar goals, but their roles and fee structures are different:
A general contractor estimates the project cost and manages subcontractors and day-to-day operations at the construction site. Because contractors must deliver the project for a specific price, they're motivated to reduce costs to increase their profit margin, creating a competitive relationship with the client.
A construction manager costs 5% to 15% of the project cost and provides similar oversight but is often involved alongside the architect at the design stage. The construction manager works for a set fee independent of the project bid, allowing for a more collaborative relationship with the client.
What does a general contractor do?
A general contractor coordinates home construction projects and is responsible for the daily oversight of the building site to keep the project running smoothly.
General contractor services include:
Pre-construction planning
Helping clients establish and stick to a project budget
Providing accurate and realistic cost estimates
Developing a construction timeline and ensuring the project meets deadlines
Scheduling and managing subcontractors, vendors, tradespeople, and laborers
Acquiring permits and ensuring all work meets local building codes
Purchasing materials and supplies
Getting estimates from general contractors
Before hiring a general contractor near you, be sure to:
Get at least three estimates to compare.
Determine if you need a pre-construction planning consultation.
Select a contractor who is licensed, insured, and bonded. Verify the contractor's state license and insurance are valid.
Read their reviews on HomeGuide and Google.
Discuss your goals, budget, and timeline.
Meet with contractors at the job site to determine if they are a good fit for your project.
Request a full itemized contract detailing the timeline, completion dates, payment schedule, and warranty.
Avoid making large payments up front. Come up with a payment schedule for work completed.
What to ask a general contractor before hiring
Are you licensed, bonded, and insured?
How many projects like mine have you worked on?
Can I see a portfolio of your past work?
Do you offer a free estimate?
What is your fee structure and payment schedule?
What is and is not included in the estimate?
Which permits are required, and will you obtain them?
How long will the project take?
How do you handle change orders during the construction process?
How do you handle damages that occur during the project?
Do you offer a post-construction warranty? If so, what does it include?