General Contractor profit margin benchmarks
The IRS reports what one-owner businesses filing Schedule C earn, by sector. General Contractor falls under Construction of buildings. For tax year 2023, 795,086 returns reported $113.9 billion in receipts, $51.3 billion in cost of sales and $15.0 billion in net income less deficit (the table gives thousands of dollars):
| Benchmark | Value |
|---|---|
| Gross margin | 55% |
| Net margin, owner pay included | 13.2% |
| Average receipts per return | $143,269 |
| Average net income per return | $18,909 |
The owner's own draw is not an expense on a Schedule C, so that net margin is mostly the owner's wage, not profit on top of it.
Where the money goes in general contracting
A general contractor's costs are mostly subs and materials, with the margin in the markup and in managing time well.
Where general contracting margin leaks, and how to win it back
- Change orders not signed
- Sub delays
- Allowances over budget
- Slow progress payments
- Overhead not spread across jobs
Ways general contractors raise margin: mark up subs and materials; get every change order signed; bill progress payments; track overhead and spread it across jobs.
Check your general contracting prices against the costs
The typical national prices from our sourced calculators are a check on whether your prices leave room for margin:
| Service | Typical | Range |
|---|---|---|
| Interior demolition | $5.25 | $2.00 to $8.50 a sq ft |
| Deck, pressure-treated | $4.50 | $3.00 to $6.00 a sq ft |
| Siding, fiber cement | $9.50 | $5.00 to $14.00 a sq ft |
Work out the margin on each line of your menu, not just the big jobs. The usual general contracting menu: additions; kitchen and bath remodels; basement finishing; interior demolition; deck, pressure-treated; siding, fiber cement; window and door replacement; project management fee; permit handling; design and estimate.
Overhead comes out of the margin before profit. In general contracting it includes general liability insurance, which Insureon's customers who are general contractors pay an average of $162 a month for; commercial auto at $287 a month on the same figures.
Work out your own margin
Put one recent general contracting job into the calculator above, or switch it to "My margin for the year" to set your year next to the IRS benchmark. A 50% markup is a 33% margin; the markup calculator shows the rest.
Sources
- IRS Statistics of Income: Nonfarm sole proprietorships, Table 2, income statements by industrial sector, tax year 2023, checked October 9, 2026
- IRS: SOI tax stats, nonfarm sole proprietorship statistics, checked October 9, 2026
- Insureon: Insurance cost for general contractors, checked October 9, 2026
- Fixr, cost to demolish a house, checked October 8, 2026
- Fixr, interior demolition cost, checked October 8, 2026
- Fixr, garage demolition cost, checked October 8, 2026
- HomeAdvisor, house demolition cost, checked October 8, 2026
- HomeAdvisor, interior demolition cost, checked October 8, 2026
- Bob Vila, cost to demolish a house, checked October 8, 2026
- Bob Vila, shed removal cost, checked October 8, 2026
- BLS Occupational Employment and Wage Statistics, May 2025 (state and national files), checked October 8, 2026
- US Census Bureau, 2020 ZIP Code Tabulation Area to county relationship file, checked October 8, 2026
- Fixr, cost to build a deck, checked October 8, 2026
- HomeAdvisor, cost to build a deck, checked October 8, 2026
- Modernize, deck cost, checked October 8, 2026
- Bob Vila, how much does it cost to build a deck, checked October 8, 2026
- Fixr, siding replacement cost, checked October 8, 2026
- HomeAdvisor, siding replacement cost, checked October 8, 2026
- Modernize, siding cost calculator, checked October 8, 2026
- Today's Homeowner, siding replacement cost, checked October 8, 2026
- This Old House, siding replacement cost, checked October 8, 2026
Last checked October 9, 2026. This page is general information, not legal or tax advice. Rules change and differ by state and city, so confirm with the agency named before you act.