How Much Does a General Contractor Charge?

Do you plan to remodel your house or build a new one? You’re likely to have heard the term ”general contractor (GC)” when you are considering a construction project. A general contractor oversees all aspects of the construction process. In order for your vision to become a reality, these professionals manage subcontractors, obtain permits, and ensure compliance with building codes.

But how much does a general contractor charge? You can hire them on an hourly basis or opt for fixed pricing models – the cost will vary depending on several factors. With the inclusion of all these factors and important details in this article, we hope to give you useful information about estimating costs while working with a reliable GC. Keep up with us!

Standard General Contractor Fee Percentage

When it comes to the fees charged by general contractors, a common practice is to calculate their salaries as a percentage of the total project cost. Typically, this fee ranges from 10 to 20 percent but can go up to 25 percent for larger-scale projects. To determine their fees, general contractors consider factors like materials, subcontractor labor markup, and the overall job price.

For example: If your home remodeling budget is $50,000 and you agree on a standard 15% fee with your GC, then they would charge an additional $7,500 (15% of $50k) for their management expertise throughout the construction process.

It’s important for clients to understand that these professionals package their fees along with all services into a single total price. This means they will handle payments on your behalf for various services rendered during the project – including materials and subcontractors’ charges. Additionally, keep in mind that contractor fees may vary based on the amount of labor involved in your specific project.

Average General Contractor Rates

When it comes to general contractor rates, there isn’t a one-size-fits-all answer. The cost varies depending on factors like your location and the scope of the project. On average, you can expect to pay between $50.00 to $150.00 per hour for their expertise.

However, some contractors don’t charge by the hour at all. Instead, they typically price their work based on a percentage of the total construction project cost – usually around 10% to 20%. For larger projects, this percentage may increase to approximately 25%.

Here’s an overview of average contractor costs in the United States:

– Average Cost: $4,000

– High Cost: $58,000

– Low Cost: $250

Keep in mind that these figures are just averages and will vary based on various factors.

General Contractor Hourly Rate

While there are some contractors who offer an hourly rate, they can be quite hard to find. Instead, what you should look for are handymen who charge on an hourly basis.

Usually, contractors provide bids or estimates for your project instead of charging per hour. However, keep in mind that some may indeed charge an hourly rate. It’s important to be aware of this so that you have a clear understanding of how much the average or general contractor charges.

On average, expect to pay around $50 – $150 per hour for a contractor and approximately $40 – $50 per hour for subcontractors or helpers. However, it’s essential to exercise caution when accepting an hourly-rate agreement, as there is potential risk involved.

Some individuals tend to drag out jobs intentionally in order to maximize their earnings. A five-hour task might end up taking nine or even ten hours! Similarly, a construction project that was initially estimated would take two weeks might extend all the way up to a month!

There are professional handymen whose labor costs can start from as low as $20–$25 per hour. So their overhead expenses are comparatively lower. But beware, they may try prolonging projects just-the-same way – squeezing every ounce of money possible from your pockets. Must request continuous progress updates and feel free to address any concerns throughout the process.

Contractor Daily Rates

When it comes to paying general contractors, daily rates are a common option. According to Angie’s List (Angi), contractors typically charge around $300 – $500 per day for their services. This rate covers their overhead expenses and includes a profit margin for the job. It’s important to be mindful of this when discussing pricing with your contractor.

To ensure transparency, always request a written bid or estimate from the contractor before starting any work. This allows you to have all costs outlined and agreed upon in advance. Keep in mind that unforeseen circumstances may arise during construction projects. There can be plumbing issues or mold discoveries behind walls. In these cases, additional time and cost may need adjustment.

It’s worth mentioning that some general contractors prefer working on fixed bids rather than hourly rates. So, the customers don’t know exactly how much they’re making per hour. Regardless of the payment structure chosen by your contractor, asking for an estimate will help you stay informed about project costs and prevent overspending.

how much does a general contractor charge

What Factors Influence General Contractor Hourly Rates?

Understanding the factors that influence the hourly rates of a general contractor can help you budget effectively for your construction project. From materials to location and project complexity, these variables play a crucial role in determining how much contractors charge per hour.

  • Cost of Materials

One important factor that influences the hourly rates charged by a general contractor is the cost of materials. Depending on the nature and scale of your project, there may be a significant amount of building material required to get started. Whether it’s lumber for constructing an addition or plumbing fixtures for a bathroom remodel, these items can quickly contribute to the overall project cost. A general contractor will take these material expenses into account when determining their pricing strategy.

For instance, if you’re looking to build a new deck, your GC will consider factors like decking boards, railing systems, screws/nails, and any other necessary supplies needed for construction.

  • Hiring Subcontractors

Another factor that influences the hourly rate of a general contractor is the need to hire subcontractors. These are specialized professionals who handle specific tasks like electrical work, plumbing, or HVAC installation. When a GC needs to bring in subcontractors for certain aspects of your project, this can impact their pricing.

For example, suppose you’re remodeling your kitchen and require an electrician to install new wiring and outlets. In that case, the general contractor will have to coordinate with and pay the hourly rate of the subcontractor. This additional cost will be factored into their overall charges when estimating your project’s total cost.

  • Scope of Work

The complexity and size of your project can significantly impact the amount you’ll pay for the services of a general contractor. For example, if you’re remodeling a small bathroom or fixing shingles on your roof, the scope may be relatively straightforward and require fewer resources. However, projects like adding an entire second story to your house will likely involve more materials and a workforce.

As most general contractors charge a percentage (typically 10% to 20%) of the overall project cost as their fee, larger-scale and time-intensive projects tend to have higher hourly rates due to the increased effort required from the GC.

  • Location and Regional Variances

The location of your construction project can also impact the hourly rates charged by general contractors. The cost of living, labor market conditions, and local building regulations all play a role in determining pricing variations across different regions. For example, hiring a general contractor in an urban area might be more expensive due to higher operational costs compared to rural areas with lower overhead expenses.

In certain cases, there are specific building codes or restrictions unique to the locality (like historical preservation requirements). Skilled contractors familiar with these regulations may have higher rates than other areas.

What Is a General Contractor Markup?

A general contractor markup refers to the percentage added to the total cost of a construction project. This fee is typically based on material costs, subcontractor labor, and additional expenses that may arise during the project. 

Your markup plays a crucial role in determining your profit margins and covering business expenses. So it’s important to ensure that your markup is sufficient for running a successful operation without compromising quality or cutting corners.

Remember, finding the right balance is key. You want to provide competitive prices while still maintaining profitability for your business.

General Contractor Fee Percentage Markup

When it comes to pricing, general contractors often charge a percentage fee for their services. This typically ranges between 10% to 20% and is based on the markup of subcontractor labor, materials, and the total project cost. There are two common types of pricing models that involve this fee markup.

The first is a fixed-cost or lump-sum agreement where the contractor provides an upfront estimate for the total cost and scope of work. In this case, they are responsible for sticking to that budget throughout the project. If there are any unexpected expenses in one area, they must find savings elsewhere.

The second type is known as a Cost-Plus agreement. Here, homeowners pay both the construction costs plus an additional percentage agreed upon with the contractor. Even if it seems good at first from the homeowner’s point of view, this is because prices are going up in different areas without the homeowner’s control. This means that budgets have to go up quite often, which only benefits contractors since homeowners have less control over these amounts.

what percent does a general contractor charge

How Do General Contractors Get Paid?

General contractors usually receive payment as a percentage of the total construction cost. This fee includes a markup on labor, materials, and supplies. For example, if your project costs $100,000 and the contractor’s fee is 10%, they would earn $10,000.

Contractors often request an upfront deposit before starting work and then establish a payment plan based on completed milestones throughout the project. This ensures that both parties are protected while keeping finances in check.

When Do You Pay a General Contractor?

Paying a general contractor typically involves an initial deposit of around 10% to 25% of the total contract price. The remaining balance is usually paid in installments based on project milestones, such as after demolition or when drywall installation begins. State regulations sometimes place limits on the amount contractors can charge as a deposit, so it’s crucial to consult local laws for specific guidelines.

Remember, each payment should be accompanied by clear documentation and receipts to ensure transparency throughout your project journey.

How to Choose a Reputable Contractor

When it comes to hiring a general contractor, choosing the right one is crucial for the success of your project. But with so many options out there, how can you find someone reliable and trustworthy? Here are some steps to consider:

  • Step 1: Start by comparing your options online. Look for contractors in your local area who specialize in the type of work you need.
  • Step 2: Gather free estimates from different contractors. This will give you an idea of their pricing and allow you to compare costs.
  • Step 3: Don’t forget about permits! Ask potential contractors if they handle obtaining necessary permits for construction projects.
  • Step 4: Request references from past clients or take a look at testimonials on their website. Hearing about other customers’ experiences can help gauge their professionalism and quality of work.
  • Step 5: Ensure that any contractor you’re considering has insurance coverage. That should include general liability insurance, which protects against accidents or damages that may occur during construction.
  • Step 6: Check if the contractor holds the proper licensing required by state regulations. This guarantees that they meet certain standards set forth by authorities.

For more on the factors for choosing the right GC, visit our knowledge hub, and explore the informative blogs!

10 Questions to Ask a General Contractor Before Hiring

  1. What is your experience in handling projects similar to mine?
  2. Are you licensed and insured? Can you provide proof?
  3. How do you charge for your services, hourly or on a fixed-price basis?
  4. Do you have a list of references I can contact for feedback on previous projects?
  5. Will there be subcontractors involved in the project, and how will they be managed?
  6. What measures do you take to ensure compliance with building codes and regulations?
  7. How do change orders get handled during construction if there are any modifications needed?
  8. Can I see examples of completed projects that are similar in size and scope to mine?
  9. How long would it typically take from start to finish for my specific project type?
  10. What kind of warranty or guarantee does your work come with after completion?


For a successful home remodeling or construction project, it is essential to hire a general contractor. In addition to bringing expertise, they manage subcontractors and ensure that your project meets building codes. Understanding the cost of hiring a general contractor is also essential to planning your budget effectively.

If you’re looking for reliable general contractors in Minnetonka, Brewer Built LLC, is here for you! With our professional experience and commitment to quality craftsmanship, we can transform your vision into reality while providing transparent pricing options that suit your needs.

Don’t hesitate! Contact Brewer Built, LLC, today for an estimate on your next project. Let us be the ones who bring life back into those blueprints!

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