What's the difference between cost-plus and fixed-price?

Cost-plus means you pay the actual cost of labor and materials plus the GC's markup, with transparent receipts. Fixed-price (lump sum) means the GC quotes one total and absorbs overruns or keeps savings. Fixed-price gives you budget certainty; cost-plus gives you transparency and flexibility on changes.

Why do contractor bids vary so much?

Bids differ because of the GC's overhead and crew, the quality of subcontractors and materials specified, how detailed the scope is, and how busy they are. A vague scope produces wildly different bids. A detailed, itemized scope is the only fair way to compare two contractors.

When do I not need a general contractor?

For a single-trade job like replacing a water heater, painting, or a flooring swap, hire that trade directly and skip the GC fee. You need a general contractor when a project involves multiple trades, permits, and scheduling that someone has to coordinate, like a kitchen, bath, or addition.

How much do general contractors charge in 2026?

Most general contractors charge 10% to 20% of the total project cost as their fee, or a cost-plus arrangement where they bill labor and materials plus a markup. In plain dollars, on a $50,000 remodel the GC's fee is usually $5,000 to $10,000. The percentage moves with project size, complexity, and how the contract is structured — which is also why two bids for the same kitchen can be thousands apart.

We build websites for contractors and run our own home-service businesses, so we read a lot of these bids. Here's the honest homeowner breakdown first — then, if you're a GC, a note at the end on winning this exact search.

How GCs price the job

Percentage of cost

10%–20% of project

The most common model on remodels. On a $50,000 project, the fee is roughly $5,000–$10,000. Smaller or more complex jobs trend toward the higher end.

Cost-plus

Actual cost + markup

You pay real labor and material costs plus a markup, with receipts. Transparent and flexible on changes, but the final total isn't fixed up front.

Fixed price (lump sum)

One quoted total

One number for the whole job. Budget certainty for you; the GC absorbs overruns and keeps any savings. Needs a detailed scope to be fair.

Day rate / management fee

$500–$1,500/day or flat

Used when you hire a GC to manage subs you've sourced. Common on smaller or owner-led projects.

What moves the price

Same project, very different bids. Here's why:

→ Number of trades — a kitchen needs plumbing, electrical, cabinetry, tile, and paint coordinated. More trades, more management, higher fee.
→ Material and finish level — stock cabinets versus custom, laminate versus stone. The GC's markup rides on these choices.
→ Permits and inspections — structural changes, additions, and code work add time and risk the GC carries.
→ Scope detail — a vague scope produces wild bids. A detailed, itemized one is the only fair way to compare two GCs.
→ How busy they are — a sought-after GC in a hot market prices higher because their calendar is full. Timing affects your number.

When you should not hire a general contractor

A GC fee isn't always worth it. Skip the general contractor and hire the trade directly if:

• It's a single-trade job — a water heater swap, painting, a flooring replacement. Call that trade and skip the management markup.
• The project has no permits and one obvious specialist. You don't need someone to coordinate one crew.
• You have the time and know-how to manage a small project and the subs yourself. The GC fee buys coordination you'd be doing anyway.

Hire a general contractor when the project spans multiple trades, needs permits and inspections, and someone has to own the schedule — a kitchen, a bathroom, an addition. On those, the fee usually pays for itself in fewer mistakes and delays.

For general contractors reading this

"How much do general contractors charge" is a homeowner about to request bids. The GC whose website shows a license, real finished projects, a clear process, and reviews gets the call before the lowball outfit does. This is exactly the kind of page we build so contractors own this search instead of paying a lead broker for the same homeowner.

We run our own service businesses on this stack. Start Getting Leads is $249/month for a hand-built contractor website with AI lead capture; Grow in Google at $597/month adds SEO for contractors and attribution. Run jobs with general contractor software, and see SEO for home services and what local SEO costs.

We don't post stock testimonials. On a 15-minute call we screen-share the real dashboards behind our own businesses — live leads, rankings, and the exact page that produced each one. See the proof →

Common questions

Is cost-plus or fixed-price better for me?

Fixed-price gives budget certainty; cost-plus gives transparency and easier changes. For a well-defined remodel, fixed-price is simpler. For an open-ended renovation, cost-plus avoids padded contingencies.

How many bids should I get?

Three is the standard. Give each GC the same detailed scope so you're comparing the same job, not three different interpretations of it.

Should I always take the lowest bid?

No. A bid far below the others usually means missing scope or a corner that gets cut. Check license, insurance, references, and what's actually included before deciding.

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