General contractors know to measure twice and cut once
Most contractors charge a percentage of the total construction costs, ranging from 10% to 20%.
If a contractor charges by hour, expect to pay between $50 and $150 per hour.
Subcontractor hiring, material costs, and project scope will impact price.
Starting a new construction project or remodeling your home can come with many unexpected surprises. That’s where the expertise of a general contractor can come in handy. Regardless of the project, you’ll need to budget appropriately, and the labor costs of a contractor are an important line item to have. But how much do contractors charge per hour? Simply put, reputable general contractors don’t charge per hour except in rare circumstances. General contractor rates are typically on a per-project basis and charge 10% to 20% of your overall project cost. However, in special circumstances, when contractors do charge by hour, you can expect to pay $50 to $150 for each hour worked.
If you’re looking for a general contractor to provide limited services, you may be able to find a contractor that charges hourly rates or even daily rates, but be wary of this pricing structure—especially if the project is a large one or hours are likely to be many. Be sure to get documented estimates beforehand to make sure everything is moving along on a reasonable schedule.
Most local general contractors charge per project based on the cost of materials, any subcontractors they need to hire, and the size and scope of the construction project.
Are you remodeling a small bathroom? Building a barndominium? Finishing a basement? Fixing a few shingles on the roof? Or adding a second story to your house? When it comes to contractor pricing, most general contractors charge 10% to 20% of the overall project cost. The larger and more time-intensive the project (and the more materials and workforce you need), the more you’ll end up paying your local general contractor for their time and effort.
Be very careful if you enter into an agreement for an hourly rate. Does the clock start when the contractor begins driving to your house? Does every phone call count as a minimum of 15 minutes or more? Can the contractor charge you for time spent researching prices and techniques online? If you do an hourly rate, be sure to set a cap, such as ‘not to exceed 20 hours per week for the duration of the job’ or something similar.
Depending on what your project is, there may be a substantial amount of building materials needed to begin. For example, if you’re constructing a home addition, you’ll likely need lumber, drywall, plumbing, and all the finishes, among other things. Those items can add up quickly, and the contractor you hire will need to account for them in their pricing. If you’re looking for newer, harder-to-find, or luxury products, such as sustainable types of wood or swim spas, costs can be even higher.
You can easily expect $40 to $50 per hour for a helper, and likely a lot more, depending on what that helper is doing, how experienced they are, and the cost of hiring construction staff in your area. Your general contractor likely has subcontractors in their network to call for jobs that need more than one pair of hands or an expert installer, and you can discuss how that impacts your pricing when getting an estimate.
Any contractor you hire should be licensed and have general liability insurance coverage and workers' compensation if they have employees. Some also have bonds, builder’s risk, pollution insurance, and other kinds of insurance. These are protections for you and the contractor, but they also raise the cost of doing business, and that cost often gets passed along to clients. However, this is an added cost you should be happy to pay. Insurance can save you from much bigger expenses in an accident, damage, injury, or other unforeseen circumstance with your job or on your property.
Most home renovations require permits, especially when plumbing or electrical work is involved. Some jurisdictions also require a certificate of occupancy and other related documentation. Permits can cost as little as $50 or more than $2,000, depending on the project and your location, and most contractors directly pass these permit fees on to customers.
Many general contractors charge added fees on top of material and other costs. Large jobs can add up quickly, so be smart and ask about all additional fees and charges before signing a contract. Below, we dissect three of the most common types of fees.
| Percentage Markup | Hourly Rate | Daily Rate |
|---|---|---|
| 10–20% of job total | $50–$150 | $300–$500 |
Rather than charging by the hour or job, many general contractors simplify the billing process by charging a percentage markup. Often, this additional contractor pricing equals between 10 and 20% of the total construction costs. This is how they pay themselves and keep their businesses solvent. It’s also an easier way for clients to estimate the cost of labor since most bids figure a total expected project cost.
Some general contractors will charge by the hour. These rates can range from $50 to $150 or more, depending on the project, the contractor, and your location. Again, it’s rare for general contractors to charge hourly rates, but some will agree to it for certain projects, small tasks, or if the client requests it. If you and your contractor agree to hourly rates, discuss what this entails and how many hours they estimate they’ll work, and get it in writing, as you may have different definitions and expectations of work hours.
Less common than percentage markups, general contractors can charge a daily rate for certain projects and work. If your contractor wants to bill this way, be sure you get in writing what constitutes a day (certain hours, number of work hours, or meeting specific production goals) and how many days they estimate the task to take so you can budget. Expect daily rates to fall in the range of $300 to $500, with higher rates possible for some projects or expert craftspeople.
General contractors will almost always estimate their job costs by the project—including project specifics, such as materials, finish items, and other details. Many industry experts agree that this is the fairest way to price construction for both contractors and clients, as costs are more likely to reflect actual work and outcomes. Contractors have a bigger impetus to do the job quickly and well, and clients are likely to get the finished product they envisioned without cost markups due to time overruns.
While your contractor’s estimates may vary for larger projects, such as the cost to frame a house, the cost to rebuild a house, or the average garage extension cost, this chart reflects the average pricing you can expect for common construction projects.
| Project | Average Project Cost | Gen. Contractor Cost |
|---|---|---|
| Home construction | $180,000–$450,000 | $18,000–$90,000 |
| Home remodel | $20,000–$75,000 | $2,000–$15,000 |
| Home addition | $23,000–$75,000 | $2,300–$15,000 |
| Bathroom remodel | $2,500–$15,000 | $250–$3,000 |
| Bathroom addition | $18,000–$50,000 | $1,800–$10,000 |
| Kitchen remodel | $15,000–$50,000 | $1,500–$10,000 |
| Basement remodel | $25,000–$50,000 | $2,500–$10,000 |
| Garage construction | $20,000–$30,000 | $2,000–$6,000 |
| Sunroom addition | $15,000–$80,000 | $1,500–$16,000 |
| New outbuilding | $5,000–$40,000 | $500–$8,000 |
| Drywall installation | $8,000–$30,000 | $800–$6,000 |
| Retaining wall | $3,000–$9,000 | $300–$1,800 |
| Deck construction | $4,500–$10,000 | $450–$2,000 |
| Concrete patio | $1,200–$5,000 | $120–$1,000 |
| New driveway | $1,700–$7,000 | $170–$1,400 |
| Fence installation | $1,600–$4,000 | $160–$800 |
| New support beam | $1,500–$6,000 | $150–$1,200 |
If you’re particularly handy, you may want to try to do parts of your construction project yourself. While this can help you save money on contractor hourly rates and contractor pricing, there are certain projects where hiring a licensed general contractor is helpful for managing all of the moving parts and is so much safer (think roofing or demolition work).
General contract work involving electrical, plumbing, HVAC/mechanical, and building or renovating structures typically requires building permits from your municipality. This work also often won’t be up to building codes unless a licensed expert completes the work. Building permits cost around $1,200 on average but can cost as little as $100 in some small towns or as much as $7,500 in large cities.
No matter what parts of the project you decide to DIY, the cost will mostly consist of the materials and tools needed to complete the job. You’ll also want to factor in the cost of time large projects might consume versus having a contractor manage the work for you. Most importantly, you’ll need to know much more than simply how to read a tape measure. Even for seemingly simple projects, you’ll want to have prior experience and the skills to manage and perform the work—and it will probably be harder than you expect.
Leah Lopez Cardenas contributed to this piece.
Whenever possible, get an estimate or bid from a general contractor in writing. You can always add any unforeseen things that come up later, such as bad wiring, plumbing, or mold in a wall. However, something like having to remove (and then reinstall) a toilet to replace the tile but forgetting to account for the time and cost to do it isn’t unforeseen.
Yes, general contractors often offer payment plans. Some contractors will ask for a down payment upfront, sometimes including the cost of some materials they need to order to start the work, and they are willing to work with homeowners to come up with a payment plan as they meet project milestones. Most states have a down payment limit, so learn what’s legally allowable in your area; for example, some states only allow contractors to collect 10% or $2,000 (whichever is less) at the start of a job and then schedule payments on the remainder of the project cost.
You don’t need to tip your general contractor. Contractors usually don’t expect tips, and some companies don’t even allow their employees to take tips, so make sure to ask before offering gratuity for a job well done. Tipping service workers is common, but general contractors and construction-trade employees isn’t. Unlike service professions where the expectation of tipping is built into the payment structure, contractors usually charge a full rate for their services and don’t expect to make up for lower billed rates with additional tips.
Most general contractors require an initial deposit between 10% and 20% of the total project cost upfront to purchase materials, secure liscenising, and hire subcontractors if needed. The remaining project costs will be billed after certain project milestones or completion dates, as per your contract. When getting quotes from general contractors, be wary of those who require a significant deposit up front—50% or greater—as this could be a red flag for a contractor scam. licensing
