Subcontractor markup on commercial construction varies by trade more than most general contractors realize. Drywall subs typically run 15–25% markup on direct cost; mechanical and electrical subs typically run 20–35%; specialty trades (cleanroom, healthcare MEP, glazing, controls) routinely hit 30–50%. Knowing the typical band per trade is the difference between catching an outlier bid and signing a contract that bleeds margin.
This benchmark documents typical 2026 markup ranges by CSI division, the underlying drivers (labor risk, equipment intensity, specialty knowledge), and how those numbers shift in tight-labor metros. It's a sanity-check tool for bid leveling, not a substitute for actual sub quotes. Apply the bands in the bid price calculator to test your rolled-up bid against what each trade should typically carry.
Typical Subcontractor Markup by CSI Division (2026)
| CSI Division | Trade | Typical Markup on Direct Cost |
|---|---|---|
| Div 02 | Demolition / Site Demo | 15–25% |
| Div 03 | Concrete (placement / finish) | 15–25% |
| Div 04 | Masonry / Brick / CMU | 15–25% |
| Div 05 | Steel (structural / misc) | 15–22% |
| Div 06 | Carpentry (rough / millwork) | 18–28% |
| Div 07 | Roofing (TPO / single-ply / metal) | 20–30% |
| Div 07 | Spray foam / insulation | 18–28% |
| Div 08 | Doors / Frames / Hardware | 20–30% |
| Div 08 | Glazing / Storefront / Curtain wall | 25–40% |
| Div 09 | Drywall / Acoustical / Paint | 15–25% |
| Div 09 | Tile / Stone / Decorative finishes | 20–35% |
| Div 09 | Flooring (commercial — LVT, carpet tile, polished concrete, epoxy) | 18–28% |
| Div 10 | Specialties (toilet partitions, lockers, signage) | 20–35% |
| Div 14 | Elevators / Vertical Conveyance | 25–40% |
| Div 21 | Fire suppression | 20–30% |
| Div 22 | Plumbing | 20–30% |
| Div 23 | HVAC / Mechanical | 20–35% |
| Div 25 | Building automation / controls | 30–50% |
| Div 26 | Electrical | 20–35% |
| Div 27 | Communications / Low Voltage | 25–40% |
| Div 28 | Electronic Safety & Security | 25–40% |
| Div 31 | Earthwork / Excavation | 15–25% |
| Div 32 | Site improvements / Asphalt / Landscaping | 18–28% |
| Div 33 | Utilities | 18–28% |
Why Trade Markup Varies This Much
Markup compensates for three things: indirect overhead, profit, and risk. Trades carry different risk profiles, which is why the bands differ:
- Drywall, paint, concrete: high-volume commodity trades. Lots of competition, well-understood scope, predictable productivity. Lower markup band.
- MEP (HVAC, electrical, plumbing): more specialty knowledge, coordination complexity, code variation. Mid-to-high band, especially on tenant improvement where field conditions are unpredictable.
- Specialty trades (controls, elevators, glazing, low-voltage): fewer competitive bidders, longer lead times, embedded engineering content. Highest markup bands.
- Site work: unpredictable subgrade and dewatering risks push these bids toward the higher end of the range, especially on greenfield work.
Regional + Project-Type Adjustments
These bands shift in tight-labor metros (NY, SF, Boston, DC) by roughly +3 to +8 points across all trades. Tenant improvement and healthcare projects also push markups up because of coordination overhead per dollar — same trades on a TI typically run 2–5 points higher than the same scope on a ground-up shell.
Public-works projects often constrain markup through prevailing-wage requirements and bid-spec clauses. Federal contracts (GSA, USACE) frequently cap subcontractor markup at published rates by trade — in those cases use the federal schedule, not the private-market band.
How to Use This for Bid Leveling
When three subs return bids on the same scope, the spread between them often tells you more than the absolute number:
- If the low bid is more than 8% below the typical band: the sub either missed scope, has unusually low overhead, or is buying the job. Verify scope first; if scope is right, the next call is to the sub asking what they think they're not including.
- If all three bids are above the typical band: something specific is driving cost on this project — labor shortage, supply constraint, schedule compression. Carry the higher number; don't average it down.
- If the spread is more than 25%: at least one bid has a scope misunderstanding. Rerun the scope review before leveling.
Methodology + Caveats
These ranges are synthesized from public commercial construction industry references (CSI MasterFormat 2024, AGC contractor cost surveys, RSMeans Building Construction Costs annual data, ENR quarterly markup reports, AIA standard contract clauses, Dodge Data & Analytics regional reports). They reflect typical 2026 ranges for US commercial subcontractor bids in the $50K–$5M range per trade — the band that flows through mid-market commercial general contractors.
They are not a primary survey of subcontractor invoices. They are not applicable to residential, public works under prevailing wage, or international markets. They reflect markup on direct cost (labor + material), not on revenue.
Want this calibrated to the trades you actually run? Upload 3–5 of your past estimates — BidFlow extracts your actual sub markup patterns by trade and shows you where bids are consistently outside your historical band.
FAQs
What is a typical subcontractor markup percentage?
Subcontractor markup on commercial construction typically ranges 15% to 35% on direct cost, with the specific number driven by trade type. Commodity trades (drywall, paint, concrete) live in the 15–25% band; MEP and specialty trades live in the 20–35% band; high-specialty trades (controls, elevators, glazing) routinely hit 30–50%.
What's the difference between markup and margin?
Markup is on cost; margin is on revenue. A 25% markup ($100 cost → $125 price) equals a 20% margin ($25 / $125). Confusing the two is the most common mistake in bid leveling — always confirm whether the number you're comparing is markup-on-cost or margin-on-price.
Why are MEP markups higher than drywall?
MEP subs carry more specialty engineering content (load calcs, code coordination, submittals), more equipment intensity (lifts, vans, specialty tools), and more risk on schedule (typically the long-lead trades on a project). All three drive markup up relative to commodity finish trades.
How do I know if a sub bid is fair?
Compare the bid against the typical band for that trade in your region, adjusted for project type. If you're 0–2 points above the band, you have a market-typical bid. If you're more than 5 points above or 5 points below, dig in: above usually means they saw something in the scope you didn't; below usually means they missed scope.
Ready to stop losing project details?
Keep every estimate, note, and approval in one timeline your whole crew can trust. Free to start.
Start Your Free ProjectBy · Last verified