How much do general contractors charge?

A general contractor is responsible for managing every detail of your project. If your project requires specialty work done outside their wheelhouse, they might hire out certain portions of the work to subcontractors, independent contractors, construction laborers and others. Still, the responsibility for the work will fall on them, and they’ll be your point of contact throughout the project. 

If you have an upcoming project that may require a general contractor, read this guide to learn how pricing works and what you can expect to pay. Then, reach out to general contractors near you and receive free estimates for your project.  

Most general contractors will charge a contractor markup, which is a way of covering their overhead expenses such as insurance, marketing, contractor salary and labor rates. Other factors such as materials, location, construction unemployment rates and scope of the project may also impact the general contractor’s pricing. 

A general contractor’s markup can be 10% to 30%. That bodes well for you — especially if you can rely on a warranty and insurance, or have questions after your project is complete. 

Before you hire a professional, you should know that there are two main ways that general contractors price their work. The first is by the scope of work, which refers to how extensive the project is. A few repairs to an existing building will cost less than the construction of a new one from the ground up. 

The second important pricing factor is size of the area that will be worked on. This is fairly straightforward: The smaller the project, the less costly it will be. 

Average cost by scope of work:

Average cost by project size:

The cost of hiring a general contractor depends on the type of project you have. Here’s a breakdown of common projects, followed by the average cost for each one. Keep in mind that costs may vary depending on where you live. 

The average hourly rate to hire your own general contractor is about $50 per hour. However, general contractor rates can range from $30 to $85 per hour, depending on the type of project and where you live. 

General contractor rates per hour:

Not all contractors charge on an hourly basis, however.

General contractor rates are typically set in several ways. Either they offer a fixed-price estimate, also called a bid or a fixed bid, or they offer a time-and-materials contract. You may, however, encounter several variations on those two main types of contracts. 

Here’s a breakdown of how pricing differs by contract type:

Fixed bid or lump sum contract

With this type of pricing, the contractor gives you the hard costs upfront and sticks to it. The downside for the contractor is that they can waste a lot of time and sacrifice some of their gross margins tracking down sub-contractors to provide an accurate bid, only to have the client (you) go with another, cheaper contractor. Because of this, you might struggle to find enough contractors to give you a fixed bid estimate. 

Time-and-materials contract

Under this type of contract, the general contractor will give you an estimate that is subject to change. You will be charged an hourly labor rate or wage rate, plus the price of the materials that they use on your project. This type of contract is more common, but it can be riskier for the homeowner if your project hits some unforeseen bumps in the road that cause it to drag on. 

You might also encounter contractors who charge a minimum fee for certain projects, as well as markups. Many contractors will consider overhead, labor and materials costs into their prices.

General contractors are often employed for public works projects and construction contracts, but they can also be highly useful for bigger home remodeling projects that require new construction or major renovations.

An experienced contractor will be able to use their contacts in the building industry to do a high-quality job. If you have a project that needs to get done on a deadline, a general contractor is the right person for the job. 

Finding a reputable contractor is an essential part of completing your project. Though it can be tempting, you don’t always want to go for the lowest possible bid, as this may actually cost you more money down the road. 

Here are a few steps you can take to make sure you hire the best possible contractor for your project:

Step 1: Compare your options online. 

Do a search for general contractors near you, and take a few minutes to sift through the results. Look for construction companies with positive reviews. Try to see if you can find a construction company that has completed projects similar to the one you are looking for. Narrow down this list to five or six of the best options. 

Step 2: Gather free estimates. 

Message or call each contractor and ask for a written estimate. If a certain contractor comes back with a higher price, ask for an explanation. 

Step 3: Ask about permits. 

Depending on where you live, you may need to get a permit for your project. Research the rules yourself by checking at your state-level or local government. If a contractor is hesitant to get the necessary permits, it’s a sign that they may not a reputable option. 

Step 4: Ask for references. 

Ask the contractor if you can have the contact information for a few other clients who needed similar projects done. A reputable contractor should have no problem providing you with a list of satisfied customers — and you will be able to rest easy knowing that they have the experience to get the job done. 

Step 5: Ask about insurance. 

Contractors are required to carry personal liability, worker’s compensation and property damage coverage, according to the Federal Trade Commission (FTC). It’s very important to verify that the contractor is current on their insurance, as this will protect you against potential lawsuits. 

Step 6: Ask about licensing. 

Not every state (and not every industry) requires contractors to carry a license, but you should check with your state or local government to see if they do. Some licenses may be industry-specific. If so, ask the contractor if they have an updated license. 

For more tips on hiring the best contractor for your project, read our guide on how to hire a contractor and visit Thumbtack’s Smart Hiring guide

Contract requirements vary by state, according to the FTC. However, you should always ask for one. It’s important to have all the details of your upcoming project in writing. Relying on verbal guarantees won’t mean anything if the project goes wrong. 

Before you sign anything, read the contract carefully and make sure it has the following information:

• Dates for the start and completion of your project. These can be estimates, but they should still be included in the contract. 
• A payment schedule for all parties. Make sure this includes any subcontractors or suppliers who will be working on the project. 
• Scope of work. For example, if you expect the contractor to be responsible for cleanup after the project, make sure that it is specified.  
• An itemized list of materials. Include the total cost and unit prices for each product and who is responsible for purchasing it (the contractor, you, a subcontractor, etc.). 
• Contact information for the contractor. Make sure this includes their name, address, phone number, and license number. 

Forming a relationship with a properly qualified and insured general contractor can have lots of benefits for you in the long run. You may only have one project to complete at the moment, but chances are you will need someone in the future for ongoing projects as well.

If you’re ready to start your project, search for the best general contractors near you and get started today.