OVERHEAD RATE FOR CIVIL CONTRACTORS — WHAT IT SHOULD BE.
The target overhead rate for civil contractors doing $2M–$8M is 10–14% of revenue. Most are running higher without knowing it because the rate has never been formally calculated — or owner salary is not included at market rate. Every point of gap between bid rate and real rate is unrecovered overhead coming directly out of net profit on every project.
Overhead rate is not a number you guess at or borrow from a trade association chart. It is calculated from your specific fixed costs divided by your specific revenue. The benchmark range gives you a target. Your real number tells you whether you are on track, elevated, or structurally underpricing every bid you submit.
WHAT OVERHEAD SHOULD LOOK LIKE FOR CIVIL CONTRACTORS.
These benchmarks apply to commercial civil subcontractors doing $1M–$12M. The range tightens as revenue scales — a $1.5M contractor may run 14–16% overhead as fixed costs are spread over a smaller revenue base, while an $8M contractor should be in the 10–12% range.
THE LINE ITEMS THAT PUSH CIVIL OVERHEAD ABOVE TARGET.
Equipment Fleet Maintenance and Administration
Civil contractors run significant owned fleets — excavators, dozers, graders, compactors. Fleet maintenance, insurance, registration, and administration that is not job-costed sits in overhead. For a civil contractor with 20+ pieces, fleet overhead alone can run 3–5% of revenue. Equipment charged to projects at a daily rate needs that rate to cover both operating costs and a proportional share of fleet overhead.
Superintendent Time Between Projects
Civil superintendents are W-2 employees on payroll whether or not they are on a billable project. Time between mobilizations — weather delays, permit delays, sequencing gaps — shows up in overhead if not job-costed. On seasonal work with significant winter downtime, this can push overhead 2–4 points above the annual average during slow months.
Owner Salary at Market Rate
Civil contractors paying themselves $80,000 per year on a $5M company have overhead understated by $60,000–$100,000 annually. Market rate for the owner-operator role at $3M–$8M civil is $140,000–$180,000. That delta is overhead not captured in the bid rate and subsidized from margin on every project.
THE CALCULATION — ONE SITTING, REAL NUMBER.
The interactive calculator: The CFOS overhead rate calculator walks through every line item category and produces your real overhead rate in about 10 minutes. Use it at constructioncfo.net/construction-overhead-rate-calculator-interactive
FREQUENTLY ASKED.
