How to use the construction overhead calculator
A construction price is assembled in layers. Material, labor and equipment form the bare cost, labor burden is added on top of wages, field and office overhead cover running the company, and profit is applied last. This calculator walks through those layers and reports the amount added at each stage.
One thing worth stressing is that these percentages are conventions rather than legal requirements in the United States. In some countries a public agency publishes an official cost calculation sheet with regulated ceilings for indirect labor, general administration and profit that bidders on public work must follow. US contractors set their own rates from their historical general and administrative expense and their target margin, and the owner reviews them commercially rather than against a published schedule.
Labor burden is applied only to wages, so the ratio of labor to material in a job strongly affects the final markup. A labor heavy renovation carries far more burden than a material heavy equipment installation at the same contract value.
The markup on bare cost result shows how much the final price exceeds the unmarked material, labor and equipment total. Comparing that figure across past jobs is a quick way to check whether the rates being used still reflect what the company actually spends.
Frequently asked questions
No. Unlike systems where a public agency publishes maximum allowable overhead and profit rates for cost estimates, US markups are a business decision. Typical ranges seen in practice are 5 to 15 percent for general overhead and 5 to 10 percent for profit, but nothing obliges a contractor to use them.
Employer payroll taxes such as FICA and unemployment insurance, workers compensation premiums, general liability, and any company paid benefits. Rates vary sharply by trade and state because workers compensation is experience rated, so roofing burden can be several times a carpentry burden.
This calculator applies profit to cost plus overhead, which is the common markup on cost approach. Some owners instead negotiate profit as a margin on the final contract price, and the two produce different numbers, so contract language should state which method governs.