Contractor Markup and Overhead Rate Calculator
Calculate your contractor markup percentage, overhead rate, and final bid price based on direct project costs, annual overhead expenses, and your desired profit margin.
Labor, materials, subcontractors, equipment for this project
Office rent, insurance, admin salaries, utilities, vehicles, etc.
Total expected revenue for the year (used to allocate overhead)
Typical contractor net profit: 5%–15%
Formulas Used
1. Overhead Rate on Direct Costs:
Overhead Rate = Annual Overhead ÷ (Annual Revenue − Annual Overhead)
2. Project Overhead Allocation:
Project Overhead = Direct Project Cost × Overhead Rate
3. Total Project Cost:
Total Cost = Direct Cost + Project Overhead
4. Bid Price (using desired net profit margin):
Bid Price = Total Cost ÷ (1 − Net Profit Margin %)
5. Markup Percentage:
Markup % = (Bid Price − Direct Cost) ÷ Direct Cost × 100
Note — Markup vs. Margin: Markup is calculated on cost; margin is calculated on the selling price (bid). A 20% markup ≠ 20% margin.