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Question DetailsAsked on 5/1/2014

Do all general contractors charge overhead profit

One of the estimates that I got from a general contractor for a bathroom remodel has a charge on paper for overhead profit and insurance bond is common. Thanks for the help

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1 Answer


All contractors have overhead (cost of doing business, office, communications, taxes, medical and workers comp insurance, vehicles and tools, "lost effort", cost of doing bids, etc), profit (or they have no reason to be in business), and insurance and bonding and licensing and certification fees (some or all wrapped into overhead in many cases).

ALL have to recover these cost in some manner - most wrap into their labor costs or total costs, some call out a separate profit/handling/stocking fee on top of materials, etc.- so you may see a breakout, or only labor charge, parts/materials.

Because all handle it differently, that is why getting firm bids is to your advantage - they are all bidding on the same bottom line, regardless of how they break it out. If you anticipate overuns or changes of conditions, THEN maybe things like labor rate, overhead and what it applies to, profit, etc need to ber spelled out too, so they are present to apply if needed. Fine in an ideal world, almost never done.

Answered 6 years ago by LCD

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