This Construction Cost Calculator is designed to help you itemize the rate and quantity of each individual element to estimate the total cost of construction project.
How to accurately calculate construction costs?
Depending on the type of project, estimating the costs of construction can either be incredibly simple or extremely complex. Regardless, creating an accurate estimate is essential to ensuring that the project is both profitable for the contractor and affordable for the client. A good construction cost estimate will account for every element of a project, including room for contingencies, financing costs, profit margin, variances, and other less obvious or unforeseen expenses. Changes are almost a guarantee in construction, so it's to everyone's benefit not to underestimate or overlook any element of a project.
Using construction estimating software or a construction estimate template can save you time and money by streamlining the entire process and making sure you don't miss anything.
Protip:You can try BuildBook's construction estimating software free for 10 days to see for yourself.
The primary construction cost categories
In order for your estimate to be as thorough and accurate as possible, it's best to at least consider every potential category when calculating the costs for a project. Each category or element may have additional considerations that could impact the cost so it may not be as simple as associating a single cost to any given cost category.
As you're calculating construction costs, consider each of the following potential cost categories:
- Site Preparation - Excavation, tear-downs, on-site rentals, disposal, etc.
- Material costs - Hardware, lumber, concrete, sheetrock, trim, flooring, etc.
- Labor costs - Labor burden, downtime, overtime, etc.
- Subcontractor costs - HVAC, plumbers, designers, landscapers, etc.
- Equipment costs - Heavy equipment fees, rentals, gas, power, etc.
- Permits and fees - Inspections, approvals, local permits, etc.
- Client Selections - Appliances, countertops, fixtures, etc.
- Indirect expenses - Administration costs, travel, delivery fees, etc.
- Capital costs - Loan interest, payment processing fee, taxes, etc.
- Profit Margin - Labor markup, material markup, general profit, etc.
- Contingencies - Seasonal challenges, client delays, cost escalations, wastage, etc.
Based on the location and/or type of the construction project, there may be other cost categories you will need to consider, or additional elements within the categories above.
How to calculate material costs in construction?
The first step in calculating your material costs for a project is to gather the quantity and cost per unit for each material you'll need. This will vary depending on the type of material, quality, and where you purchase it from.
For example, if you're using concrete, the price per cubic yard can range from $50 to $100 or more based on your location alone. If you're using lumber, the price per board foot can range from $0.50 to $2.00 or more, depending on the type of wood and whether it is a premium grade or not.
Once you have the cost per unit for each material, simply multiply that number by the quantity of each material needed to complete your project. For example, if you need 10 cubic yards of concrete and the price is $75 per yard, you'd multiply 10 x $75 to arrive at a material cost of $750.
The final step is adding all of your material costs together to arrive at your total cost of materials for a project.
How to calculate labor cost in construction?
It is important to consider all of your additional costs when calculating your actual cost of labor. Failing to factor in the additional costs can have a large negative impact on the profit of your project.
The formula for calculating the construction labor cost for each employee is: (Hourly Wage + Hourly Labor Burden) *Hours Worked/Needed
To learn how to calculate your labor burden to determine your actual hourly labor cost, check out our construction labor cost calculator.
How to calculate close out costs in construction?
There is no one-size-fits-all answer to close out costs in construction as the costs associated with closing out a construction project can vary greatly depending on the specific project. However, some of the most common expenses that may be incurred when closing out a construction project include contractor fees, final material expenditures, clean up and disposal, and warranty work.
How to calculate carrying costs in construction?
Carrying costs can be a significant factor for construction projects, especially for those that are taking longer than expected to complete. Projects that are delayed can also see an increase in their carrying costs as the cost of labor and materials continue to rise.
These costs can include interest on construction loans, labor wages, equipment expenses, and material costs.
Depending on which costs you'll incur during your projects, the calculations will be very different. For example, using our free construction loan calculator (shown below), you can determine the total cost of the loan and potential profit based on just a few simple variables - loan amount, interest rate, length of project, and final cost to the client.
How to calculate construction cost per square feet
Since the cost of construction is often measured and evaluated by its cost per square foot, you may want to determine this number for your construction project.
Once your total construction cost is determined, calculating the cost per square foot is as simple as dividing the cost by the total square footage of the project.
The formula is as follows: Total Cost of Construction / Total Square Feet = Construction Cost Per Square Foot
To help calculate the total square feet of your project, use our construction square footage calculator.
