Bid Builder
Stack direct costs, subcontractor markup, overhead, contingency, and profit into a bid price, and see the price per square foot you are proposing.
Overhead is applied to your own labor and materials, where your shop cost lands. Subcontractors are marked up for the coordination, schedule, and warranty you carry for them.
How the math works
- Direct cost: materials, subcontracted work, and your own field labor. This is the number a customer can price-shop, so it is the number your markup has to survive.
- Subcontractor markup: 5 to 10% is the common 2026 range on residential work. It pays for the schedule coordination, the clean-up you will end up doing, and the warranty you carry when a sub does not answer the phone.
- Overhead: applied to your own labor and materials, where the shop cost accumulates. General liability, trucks, phones, estimating time, and the office are what this line is buying.
- Contingency: 3 to 5% on defined scope with drawings, 8 to 12% on a remodel behind walls you have not opened. Contingency is not profit: it is the money you spend when something is not as drawn.
- Profit: taken on the loaded total, not on direct cost. A 15% profit on a bid is 17.6% on the direct cost, and the difference is the first thing a customer quotes at.
- Price per square foot: bid ÷ area. 2026 whole-house residential remodels land near $80 to $200 per sq ft, additions $120 to $250, and kitchens and baths higher than the house average, so use this line to test where your bid sits against the market.
What margin should a contractor bid?
15 to 20% is a durable target on residential work in 2026: it survives one change order fight, one warranty call, and one customer who pays 45 days late. Bidding 8 to 10% to win the job is a real strategy, and the price is that a single claim ends the year in the red.
Should overhead be charged on subcontractor work?
Not as a second percentage on top of the sub markup. The sub markup already carries the coordination cost. Apply overhead to your own labor and materials, and mark the subs for what you carry for them.
Why is my price per square foot higher than the neighbor got?
Because the neighbor bid a number, not a structure. Compare the price per square foot line against local 2026 ranges for the room type, and if you are far above, check your contingency and your sub markup before you cut profit.