The percentage a contractor adds to their costs to cover overhead and make a profit.
Markup is the amount added to a contractor's estimated direct and indirect costs to cover overhead and profit. It is typically expressed as a percentage of cost and applied to labor, materials, subcontractor, and equipment costs. Markup rates vary by contractor, market conditions, and project risk.
The subcontractor applied a 20 percent markup to his labor and material costs, adding $40,000 to his base cost of $200,000.
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