General Contractor Markup: What's Typical and What Yours Should Be
Published GC markups range from under 10% to 50% — which tells you the number is a decision, not a fact. What the ranges actually reflect, and how to set yours.
Ask what markup general contractors charge and you'll get confident, contradictory answers: 15–20% (Angi), 20–33% (foreman.co), "30–50%" (Buildern), 10–20% (contractor-growth networks), and Reddit threads that span 9% to 100% by job size. Someone is wrong? No — they're answering different questions in different circumstances, and the numbers only look incompatible until you see what markup actually pays for.
What markup has to cover
Markup isn't profit. It's the lid that has to cover two things, in order:
- Overhead: insurance, vehicles, office, software, estimating time on lost bids, warranty callbacks on won ones. Typically the biggest share.
- Net profit: what's left for the owner and for absorbing the surprises a year contains.
This is why the published ranges differ so much. A GC working from a home office with one truck and steady subs can price fine at the low end of the band. A company carrying a showroom, a project manager and a warranty fund needs the top of it. Neither is gouging; their costs are different. The right question is never "what do others charge" but "what does MY overhead + target profit require."
Markup vs margin: the expensive mix-up
Say your business needs 25% of revenue for overhead and wants 8% net. That's a 33% margin — which requires a 50% markup on cost ($1.00 cost ÷ 0.67 = $1.49 price). Price with "a 33% markup" instead and you collect $1.33 per cost dollar — a 24.8% margin — and your overhead share quietly eats the entire "profit." This single confusion is, in our experience reading contractor forums and the published guides alike, the most common arithmetic failure in residential pricing. The conversion table below is the antidote.
| Markup on cost | Margin on price | Gross profit per $100k of cost |
|---|---|---|
| 15% | 13.0% | $15,000 |
| 20% | 16.7% | $20,000 |
| 25% | 20.0% | $25,000 |
| 30% | 23.1% | $30,000 |
| 40% | 28.6% | $40,000 |
| 50% | 33.3% | $50,000 |
Check your markup against the margin you actually need →
How to set your markup: work backwards, not sideways
- Total your annual overhead and divide by expected revenue to get overhead as a percent of sales (the overhead calculator does this per hour and per dollar).
- Add your target net profit — for owner-operated residential work, pick the number your plans actually require, not a forum's.
- Add the two: that's your target margin. Convert to markup: markup = margin ÷ (100 − margin).
- Stress-test: take three past jobs and re-price them at your new rate. If a real past job would have lost the sale by a mile, the honest fixes are lower costs, narrower scope, or a different customer — not a silent margin cut.
Where this leaves the published numbers
Use the ranges as a sanity check, not a target: if your required markup lands far below the published band for your project type, suspect you've under-counted overhead (estimating hours and warranty time are the usual escapees). Far above it, the honest questions are about cost structure and positioning — or whether that particular job should be yours at all. The number that matters is the one your own arithmetic produces.
Start from your real overhead, not someone else's range →
Frequently asked questions
What is a typical general contractor markup?
Published sources put residential GC markups in a wide band: Angi cites roughly 15–20% as common, construction-industry publications range 10–40% depending on project type, and custom-home builders are often higher. The spread is the point — markup reflects your overhead structure, risk and service level, not an industry standard. Treat any single number as one data point, then build your own from your costs.
Is 30% markup too much?
A 30% markup on cost is a 23% margin — about $23 of gross profit per $100 of revenue. Whether that's too much depends on what your overhead consumes: if overhead runs 15% of revenue, a 23% margin leaves ~8% net before taxes, which is a healthy but not extravagant residential business. It's not greed; it's arithmetic that only works if your costs support it.
Do GCs mark up subcontractor work?
Usually yes — the GC carries coordination, scheduling, warranty and risk for subbed work, and the markup pays for that. Whatever you mark subs up to, be consistent and know your margin on that revenue; sub-heavy jobs live and die on the coordination costs first-time GCs forget to count.