How much does the general contractor make?

Contractor Salary Guide: Find Out How Much Contractors Earn.

It is difficult to calculate the typical contractor compensation. If you're wondering how much does the general contractor make?, the answer is that it depends on where you live, what trade you're talking about, and so on.

According to the Bureau of Labor Statistics (updated May 2017 by BLS), below is a breakdown per trade. Keep in mind that these earnings are presented as the “median” salary.

That is, "the salary at which half of the employees in the occupation earned more and half earned less."

Survey

The BLS Occupational Employment Statistics survey provided the median salary data.” Essentially, it implies that the salaries indicated here are square dab in the center - half of those questioned earned less than the sums mentioned here, and half earned more.

Contractor salary by trade (shown as “median“):

Carpenters make an average hourly wage of $21.71, or $45,170 per year.
Construction laborers receive an average hourly wage of $16.08, or $33,450 per year.
Electricians make an average hourly wage of $26.01, or $54,110 per year.
Flooring and Tile Contractors make an average hourly wage of $19.35, or $40,250 per year.
General contractors (including construction managers) make $43.93 per hour, or $91,370 per year on average.

Now, if you came here seeking for General Contractor wages (or independent contractor pay), this final figure takes a few of variables into account that you should be aware of.

Based on the BLS Occupational Employment Statistics survey, the BLS reported the above wage for General Contractors. However, they claim in their piece that the BLS Statistics for General Contractor Wages include “construction managers” and a few other leadership jobs.

So this listing gives you a decent starting point, but obviously a Construction Manager at a large commercial construction business is not the same as a General Contractor handling residential builds and remodels.

How much you can earn is determined by a few factors:

1- Business Ownership

To begin, a contractor's income is determined by whether or not you own your own firm. For the sake of this post, we'll pretend you own a thriving construction company or specialist skilled craft firm.

At the end of the day, it is determined by your profitability as a business owner. That is, if you are not working quickly enough to be successful, or if money is seeping out someplace else, your take-home income will decrease.

On the other hand, if you learn how to manage your staff well and are able to benefit from each assignment, you may do rather well for yourself. * Below, we'll go through how to determine your own compensation as a construction firm owner.

2- Where You Live and Operate

This one is straightforward: what you make in New York City will differ from what you make in Nicholasville, Kentucky.

So, while this article provides a helpful rough figure for how much money you may make in construction or how much a contractor pay will be, you should verify local hourly pay for a more precise version.

Checking your local listings on the web is a simple method to achieve this. LinkedIn is an excellent resource for researching your future earnings.

Simply go to LinkedIn's Salary Guide and search for phrases such as Construction, Tradesmen, or any specific trade you're interested in.

You'll be able to locate beginning wages in your region immediately. If you don't already have a LinkedIn account, read our blog post "LinkedIn 101 for Construction Industry Professionals" to discover how to get one and how to improve your profile.

You may also phone a few organizations that you'd be interested in working for, or if you're running your own business, identify organizations that are near to performing the kind of job you do.

If they are recruiting, just ask, "How much do you pay someone with xx years of experience?"

3- Quality of Work, Services, and Clients

This one is a little trickier, but we'll do our best to break it down.

Assume you're a ten-year carpenter who performs fantastic job. You've done everything and now want to start your own remodeling/design business, but you're not sure how much you can or should charge.

It will rely, in part, on how excellent your work is and how confident you are in the quality of your job, as well as finding the proper clientele who will pay for it.

In other words, you may be the finest contractor in the world, but if you target clients who can't afford to pay you what you're worth, you won't be able to make what you need or want to.

Alternatively, you may be contacting people who can afford you at the amount you want to charge but refuse to pay it. Some homeowners just believe that you should not be so expensive and are seeking for a bargain.

On the other side, if you clearly express the quality of your work, the services you give, and why you're worth the greater price, you'll be able to be more selective with the kind of clients you have.

For example, there may be a more affluent town nearby where homeowners are ready to pay a premium cost for contractors that keep the project site clean and do outstanding work.

Also, you can focus on one specialized construction area such as cannabis facilities construction.

As A Construction Company Owner, How Do You Determine Your Salary?

Are you the proprietor of a construction company? Maybe you're thinking of beginning your own construction firm. A frequently discussed issue is how to determine your compensation as the owner of a construction firm.

It is difficult to determine the owner's remuneration. There is a delicate balance to be struck between taking too much and taking too little.

If you take too much, the organization may suffer from a lack of cash flow. If you take too little, you will have less desire to continue working hard.

When deciding on your compensation rate as a construction firm owner, there are several aspects to consider.

1. Cash Flow

A contractor compensation (= your wage) cannot have a negative influence on the company's financial flow. As the owner, you must ensure that the business can pay its debts.

Payments for equipment, such as automobiles, are included. It also covers the payment of material bills.

The cash flow generated by your initiatives must be sufficient to pay the direct costs of the task.

Taking on too much of a pay might place your firm in a bad cash flow situation. You want to be certain that your compensation is not putting a strain on the cash flow of your firm.

This may need adjusting your compensation when company is slow or cash flow is showing indicators of not being able to keep up.

If you discover that you are unable to draw an adequate compensation from the firm, you may need to rethink your company model.

A suitable pay is a relative concept. Self-evaluation may be necessary to evaluate whether you need to reduce your lifestyle to fit into your business or raise your business to support your lifestyle.

2. Corporate Structure

The business structure you select might have an influence on how you establish your remuneration.

There are several kinds of corporate structures. The corporate structure that you have chosen has an impact on how you establish your remuneration as the owner of a construction firm.

It is strongly advised that you consult with your accounting professional on how your company's structure affects your compensation.

When establishing a construction firm, you can select from a variety of corporate forms. Sole proprietorships are the simplest to establish. However, they provide the least level of security for you as the owner.

Without a barrier between you and your firm, the money made by the firm is what you make.

As the owner, you are protected by a corporation. The corporation exists independently of you and is treated as a distinct entity. C-corps and S-corps are the two most common forms of corporations.

Each has distinct qualities that must be taken into account when deciding on a corporate form for your construction firm.

And each one has an influence on how your income as a construction firm owner is determined. Again, consult with your accounting professional on how to determine your wage while running your business in one of these formats.

There are other corporate forms available, such as a Limited Liability Company (LLC) and a Limited Partnership (LP). Both are distinct arrangements that have an influence on your compensation as the owner of a construction firm.

Keep in mind that in any arrangement in which you have a partner, you must ensure that how each of you takes your compensation is clearly written out. This is something that may be spelled out in a partnership agreement.

3. What Does The Market Pay for Your Position

Being an owner is a distinct function. Being an owner is not the same as being a foreman or an estimator.

There is a distinction to be made between dividends and a paycheck. Dividends are paid to shareholders.

Employees receive a paycheck. When you go to work every day, you are an employee, and your salary should be in line with what the market would pay for your position.

Is a foreman in your trade paid $25 per hour on the market? Then you're probably not going to be able to charge $50 per hour for the same services.

If you set your weekly salary to what you would spend to hire someone to fill your role, you will discover that the firm performs better financially.

The net income for the firm is what remains after all of the firm's direct costs and overhead have been paid. The remaining funds might be utilized to pay dividends to the company's shareholders.

Each corporate structure considers income differently at each level of the company's financial statements. Before making any judgments concerning your compensation as a construction firm owner, consult with your accountant or tax specialist.

In conclusion

Setting a pay for workers or identifying a contractor's precise remuneration is a tough task. This is especially true when an employee assumes and fulfills numerous jobs. What is the importance of each role? How much time do they devote to each of their roles?

It is tough for a dynamic employee to answer these queries. And it doesn't get any simpler when it comes to determining the owner's remuneration because most owners occupy almost every function inside the firm.

You're scouring the yard for nails one day. The next day, you close a $500,000 project sale.

Treat yourself the same way you would any of your other workers. What value do you provide to the organization?

Determine your salary accordingly.

As you want to enhance your salary, start by removing the portions of your job for which you are overpaying. Delegate as much as possible.

Giving yourself a solid compensation will encourage you to continue expanding your business.

It will also demonstrate to your staff that you are aware of your own worth. Being able to accurately value oneself will help you get the respect of your staff.