Question 1

What is a fully burdened labor rate in construction?

Accepted Answer

A fully burdened labor rate is the total cost per hour of employing a worker, including the base wage plus all mandatory and discretionary employer costs: FICA (7.65%), FUTA (0.6%), SUTA (~2.7%), Workers' Compensation insurance (varies by state and trade, typically 5–25% of payroll), General Liability insurance (~4–6%), health insurance (~8%), paid time off (~4%), and small tools (~2%). For a journeyman carpenter in Texas earning $28.51/hr base wage, the fully burdened rate is approximately $39.64/hr — about 39% above base wage.

Question 2

How do Workers' Compensation rates vary by state for construction trades?

Accepted Answer

Workers' Compensation rates are set by each state's rating bureau (most use NCCI — National Council on Compensation Insurance) and vary significantly by trade classification code and state. For example, a framing carpenter (NCCI class 5645) pays approximately 7.5% of payroll in Texas, 12.8% in California, 5.2% in Florida, and 16.1% in New York. Rates are applied as a percentage of gross payroll and are multiplied by the contractor's Experience Modifier Rate (EMR), which reflects their claims history.

Question 3

What overhead percentage should I add to a construction bid?

Accepted Answer

Most construction contractors add 10–15% overhead to cover indirect business costs: office rent, utilities, administrative staff, vehicle costs, insurance premiums not allocated to specific jobs, software, marketing, and equipment depreciation. The standard industry benchmark is 10% for small to mid-size contractors. This is applied to total direct costs (labor + materials + travel) before adding the profit margin.

Question 4

What profit margin should a contractor add to a bid?

Accepted Answer

Industry standard profit margins for construction range from 8–20% depending on project type, competition, and risk. Residential remodeling typically targets 13–15%. Commercial new construction may target 8–12% due to competitive bidding. Insurance restoration work often supports 15–20% due to complexity and documentation requirements. The profit margin is applied on top of all costs (direct labor + materials + travel + overhead), not just labor.

Question 5

How do I calculate labor costs for an insurance claim or ADA renovation?

Accepted Answer

Insurance claim and ADA renovation projects typically command higher labor rates than standard residential work due to documentation requirements, compliance standards, and scheduling constraints. A common approach is to apply a rate multiplier: Insurance Claim work typically uses a 1.25× multiplier on the base burdened rate, while ADA Renovation uses 1.18×. This reflects the additional time required for code compliance, documentation, and coordination with adjusters or accessibility consultants.

Question 6

What is the IRS mileage rate for 2026?

Accepted Answer

The IRS standard mileage rate for 2026 is $0.725 per mile for business use of a vehicle, as established by IRS Notice 2026-10. This rate covers fuel, depreciation, insurance, and maintenance. For construction crews traveling to job sites, total travel cost = (round-trip miles × $0.725) × number of workers × number of trips.

Question 7

How do I export my construction estimate to Contractor+?

Accepted Answer

This calculator generates a Contractor+ compatible CSV file with all line items formatted for direct import. In Contractor+, go to New Estimate → Import → Upload CSV. The exported file includes columns for Item Name, Description, Category, Quantity, Unit, Unit Cost, and Total, matching the Contractor+ Ultimate import format. Labor, travel, materials, overhead, and profit are each exported as separate line items.