How is markup defined in construction estimating?

Markup in construction estimating is defined as the percentage added to the cost of a project to cover profit and overhead. This calculation is essential for a contractor to ensure that all expenses incurred during the construction process, including direct costs such as labor and materials as well as indirect costs like administrative and overhead expenses, are adequately covered.

By applying markup, a contractor can achieve a profit margin that maintains the viability of their business while ensuring that all costs associated with delivering the project are compensated. Proper understanding and calculation of markup help in creating competitive and realistic bids that reflect both the costs involved and the financial goals of the business. This ensures that projects are not only feasible in terms of completion but also sustainable financially for the contractor.