What markup should a general contractor use?
Updated 2026-07-17 · figures as of July 2026
A typical correct bid runs about 25% over bare cost, and strong-margin work runs about 50% over. The honest answer is not a single number but a deliberate choice among tiers, made with the bare-cost floor visible. Contractors lose margin not because they choose a low markup, but because they never quite see the choice being made.
Why is +25% the expected correct-bid rung?
Because it is roughly what overhead recovery plus sustainable profit requires for a typical small GC. A 25% markup is a 20% margin, and out of that margin comes insurance, vehicles, estimating time, supervision, callbacks, and only then profit. Below that rung, the business is subsidizing the job. The +25% figure is a rung to reason from, not a rule: your overhead number may demand more.
When is a +50% markup the right call?
Small jobs where fixed costs dominate, high-risk scope with concealed conditions, schedule-compressed work, jobs requiring scarce specialty labor, and any work where your pipeline is full enough that marginal jobs must pay strongly to displace alternatives. Premium pricing is a legitimate tier, not gouging; what makes it defensible is that it is chosen with the floor visible, from the same cost basis as every other tier.
What is the markup-vs-margin trap?
Setting a margin target and applying it as a markup. A contractor who needs to keep 25% of revenue must mark up cost by 33%, because a 25% markup keeps only 20% of the price. Applied to a $300,000 job, the confusion silently gives away five figures. The fix is mechanical: know which number you are using, and make the tier decision from a display that shows both cost and price.
How do you make the markup decision explicit on every bid?
Read every finished estimate at three tiers before quoting: Bare (the floor you never bid), +25% (the expected rung), +50% (the strong-margin price). This three-tier ladder is the convention Craft Estimate Pro puts on every estimate. It is a presentation discipline any contractor can adopt, and adopting it is the point: the margin decision belongs in the open, on the same screen as the floor, every single time.
Frequently asked questions
- Is a 25% markup the same as a 25% margin?
- No. A 25% markup on cost yields a 20% margin on price. To keep 25% of the price, mark up cost by about 33%. Confusing the two quietly underprices every job.
- Should markup vary by trade or by job?
- By job. Risk, size, schedule, and pipeline justify moving between rungs. What should not vary is the visibility of the decision: same cost basis, same tier display, explicit choice.
- What should a contractor never do with markup?
- Hide it from themselves by padding line items. Padding blurs the cost basis, makes change orders unpriceable, and turns the margin decision into an accident. Keep bare cost clean and apply markup in the open.
Price your next Tampa Bay job from the same grounded cost data these figures come from, with your margin visible at three tiers before you bid.
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