When planning to undertake a construction project, whether it’s a new build, remodel interior or exterior renovation, one of the most important decisions is choosing a general contractor. With so many options out there, how do you know you aren’t getting ripped off? That’s where a general contractor pricing guide comes in handy.

In this guide, we’ll take a closer look at the factors that affect pricing, how to manage costs, and how to find the right contractor for your project.

So, let’s dive into it. 

Understanding Contractor Costs

Contractor labor rates are an essential component of any construction budget. Understanding the various costs involved in hiring and working with contractors is crucial for effective management. It allows for making informed decisions and ensures the success of your project. 

General labor rates are broken down into direct and indirect costs. Direct costs include materials and equipment. Indirect costs include overhead expenses, insurance, and taxes. 

Understanding these costs and how they are determined ensures making an accurate budget for the commercial project. It also avoids unexpected expenses down the line. 

Let’s explore the different factors that affect contractors’ rates and typical fees. 

Factors That Affect Contractor Pricing

When planning a construction project, it’s essential to consider the factors that impact contractor pricing. Understanding them will help you negotiate a fair price. 

Here are the factors affecting contractor rates so you get the best possible value for your project.

  • Scope of work– Bigger or more complex projects come with higher costs of labor and materials.
  • Project location – Contractors in locations with high costs of living and higher wages charge a bit more for their services.
  • Materials – High demand for materials required for the project will lead to a hike in the prices. This has a significant impact on the overall budget.
  • Timeline – Rush jobs cost more since contractors have to work overtime and hire extra staff to meet the deadline.
  • Contractor experience – More experienced contractors with higher skills and knowledge charge more since they guarantee high-quality work.
  • Reputation – Contractors with a strong reputation for quality work and great customer service charge more while guaranteeing peace of mind.
  • Overhead costs – The more overhead costs the bigger the budget for the project becomes. 

Overall, the above factors determine contractor pricing but vary widely depending on particular circumstances of the project such as location, size, and complexity. 

Typical Fees Charged by Contractors

It’s important to understand the typical fees charged by a contractor before hiring one. Let’s explore a few of them so you get a deeper understanding of what to expect.

Labor Fee

The general contractor labor rates include wages for the construction workers, and administrative, and management staff who oversee the project. Labor costs depend on skill set, experience, and type of construction project.

Material Costs

Contractors charge for materials to complete the project. Building materials include lumber, roofing material, concrete, and siding supplies. Material costs depend on the quantity and quality required for a project.

Overhead Costs

There’s also a fee to cover overheads including insurance, equipment rental, contractor management software, and licenses. These usually eat up about 24% to 54% of the contractor’s income. 

Overhead costs also cover regulatory requirements to complete the project.  


Contractors charge a markup of about  10% to 20% on the cost of materials and labor. The markup is a percentage of the overall project budget. It covers overhead expenses and the contractor’s profit. 

Change Order Fee

Clients sometimes change the scope of their projects or timelines. Contractors typically charge a fee to cover this. The fee covers the additional resources and time required to manage the change. 

Types of Contractor Pricing

When it comes to hiring a contractor, the pricing model is an essential factor to consider. Understanding the different contractor rates options will help you make an informed decision on the one that will work best. 

Let’s explore the contractor pricing methods to help you decide which one is the best fit for your project. 

Fixed-Price Contracts

You can agree on a fixed price with the contractor before the project starts. The fixed fee doesn’t consider the time and resources likely to be used on the project. 

Cost-Plus Contracts

The pricing structure allows the contractor to charge for the actual cost of the work including a markup for their services. Cost-plus contracts are favorable for big projects where the cost of labor and materials can vary significantly. 

Time and Materials Contracts

Alternatively, contractors can charge depending on the actual hours and materials used to complete the project. The contractor may charge per hour and include the price of materials, equipment, and other expenses. 

Tips for Managing Contractor Costs

Contractors are valuable when looking to complete your project. However, managing costs can be a challenge. Unexpected expenses can quickly add up and push the project over the budget. 

To avoid such issues, it’s important to establish a realistic budget, communicate effectively, and monitor progress. 

Let’s explore them in detail. 

Establishing a Realistic Budget

After choosing a contractor, you must set a realistic budget. The budget must include all anticipated costs associated with the work including labor, materials, equipment, and other costs. Ensure to budget for unforeseen costs or any changes in the project scope. 

Communicating Effectively with Your Contractor

Effective communication is key to managing contractors’ rates. Ensure communication regularly with the contractor about project progress, costs, and changes to the scope of work. 

Open lines of communication help avoid surprises and ensure the work goes as expected. 

Monitoring Progress and Staying on Budget

Lastly, ensure to monitor the project progress and budget closely. Track labor hours, materials used, and other related expenses. Real-time tracking allows for identifying and addressing issues early to prevent cost overruns. 

Finding the Right Contractor for Your Project

In this fast-paced and highly competitive construction industry, it can be overwhelming to find the right contractor. However, with a little research and careful consideration, you can find the perfect contractor to meet your needs and expectations. 

Here are some key factors to consider to ensure you choose the right contractor for your project.

Researching Potential Contractors

Research helps evaluate the experience, skills, and past work of potential contractors. You’re also able to identify those who can work within your budget. 

Reviewing a contractor’s credentials mitigates risks associated with hiring unqualified or uninsured contractors. Thorough research gives you peace of mind that you’ve made a thoughtful and informed decision to hire a particular contractor. 

Asking the Right Questions During the Interview Process

When interviewing contractors, asking the right questions allows for assessing their qualifications. It clarifies your expectations and makes the contractor understand your project goals and requirements.

You also build rapport when you ask the right questions to the contractor during an interview. It allows realizing potential risks of working with that particular contractor. 

Checking References and Credentials

Among the benefits of checking the references and credentials of potential contractors before making a final decision is verifying their qualifications including licenses, experiences, and skills. You also gain insight into the contractor’s performance. 

There’s also a chance to build trust with a contractor after getting reassurance of having a positive track record of providing quality work. You can compare and evaluate the candidates and negotiate payment depending on their past performance and qualifications. 

General Contractor Hourly Rates and Costs

Hiring a general contractor can be a cost-effective way to complete your construction project. However, it’s important to understand the general contractor rates per hour and costs associated with their services for seamless budgeting and planning. 

Let’s explore the contractor labor rates per hour, typical costs for services, and tips on negotiating contractor pricing. 

Understanding Hourly Rates for General Contractors

Hiring a general contractor can be a significant expense. One of the essential factors to consider when budgeting is the general contractor cost per hour. 

Understanding how general contractor hourly rates are set will make it easy for you to decide who to hire and how to manage the budget for your project. Some factors that influence the rate per hour for general contractors include:

  • Experience and qualifications
  • Project size and scope
  • Location
  • Overhead costs 
  • Hiring subcontractors 
  • Your negotiation skills 

Homeguide says the average hourly rate for general contractors is between $50 to $150.

Typical Costs for General Contractor Services

One of the key aspects when planning a construction project is the contractor’s cost. Different factors determine the charges including project scope and size. 

Here are some typical fees associated with general contractor services. 

ServiceGeneral contractor cost
Build a house$18,000 to $83,000
Home addition$2,200 to $15,000
Home remodel$2,000 to $15,000
Build a garage$1,900 to $5,700
Bathroom remodel$550 to $3,000
Driveway installation$170 to $1,400
Fence installation$160 to $700
Raise a house$1,000 to $8,000
Build a deck$440 to $2,000
Finish a basement$2,200 to $9,200

The average general contractor fees for a house are 10% to 20% of the total budget. It includes profit, overhead costs, and markup on labor and materials. 

How to Negotiate General Contractor Pricing

Negotiation is an essential part when hiring a contractor to ensure you don’t overpay for the services you need. However, negotiating prices can be tricky. Success requires skills and strategy. 

Here are some valuable insights to help you get the best deal possible. 

Do Your Research

Before you begin the negotiation process, research to understand the market rate for the work you need to be done. You will get a good idea of what you should be paying the contractor for your commercial project.

Be Clear About Your Needs

Communicate your needs for the project clearly and concisely. Give the contractor as many details about the project as possible. It gives the contractor a chance to understand your expectations and to determine a fair price for their services. 

Get Multiple Bids

Getting quotes from various contractors allows for comparing their services and prices. You can make a shortlist of potential contractors. It makes it easy to narrow down to one with the potential to give you the best value for your money. 

Focus On Value

Don’t make the mistake of solely focusing on price when negotiating general contractor fees commercial. Focus on the value you’re likely to get from them. Ideal contractors use high-quality materials, have a strong reputation, and have a portfolio of happy clients. 

Put Everything In Writing

After agreeing on pricing and terms, ensure to get everything in writing. The contract must include the scope of work, payment terms, deadlines, and other important details related to your project. A written agreement avoids disagreements down the line. 

Following those tips will ensure that you find a general contractor who will deliver quality services within your budget and give you the best value. 


A general contractor pricing guide is a valuable resource for contractors and clients. It offers a framework for estimating project costs considering various factors such as materials, labor, and overhead costs. 

The guide helps clients compare quotes from different contractors to ensure they get a fair and competitive price for the work they require. A combination of a pricing guide and a professional contractor ensures a successful and budget-friendly construction project. 

Recap of Key Takeaways

Here are some takeaways from the general contractor price sheet:

  • Offers a framework for determining contractor estimate cost 
  • Allows comparing quotations from different contractors to get a competitive price
  • A guide is a tool but not a guarantee of the final contractor price
  • Allows getting an accurate general contractor estimate 
  • A pricing guide and a professional contractor ensure a successful and cost-effective project 

Final Thoughts and Recommendations

A pricing guide is a valuable tool for general contractors and their clients. However, it’s important to note that it’s only part of the process. Other considerations include contractor reputation, experience, and project scope. 

Contractors can use construction scheduling software for estimating such as Field Complete to determine fair and transparent pricing. This builds trust with customers and establishes a positive reputation in the industry.