Contractor markup ranges by trade in 2026 — what's normal and what's predatory

Every contractor marks up labor and materials. That's the business model — it's not a scam. The question isn't whether markup exists; it's whether the markup is in the normal range, or whether you're paying for someone else's yacht.

This guide lays out the observed markup ranges for the 8 trades most commonly quoted to homeowners in 2026, based on industry pricing data from Angi, HomeAdvisor, the NAHB (National Association of Home Builders), and regional labor statistics from the BLS. Ranges are presented as Fair, High, and Predatory tiers for each line item.

What "fair markup" means: across all residential trades, the industry average gross margin in 2024 was 28-35% (source: Qualified Remodeler 2024 State of the Industry report). Margins above 45% on simple-scope jobs are unusual; margins below 20% are unsustainable for a licensed contractor carrying insurance and payroll.

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1. Roofing

Most expensive thing most homeowners buy on a typical decade. Highest-markup-variance trade in the industry.

Labor rate, residential asphalt shingle (2026):

Fair: $55-85/hour
High: $85-115/hour (justified in high-cost MSAs like SF, NYC, Boston, Seattle)
Predatory: >$115/hour anywhere; always >$140/hour

Materials markup (above wholesale):

Fair: 30-50% markup
High: 50-75% markup
Predatory: >75% markup

Line items most commonly inflated:

Dumpster rental. A 20-yard dumpster for 5 days runs $400-650 in most markets. If your quote shows $1,200+, that's a flagged line item.
Permit fees. Residential re-roof permits typically cost $150-400. If the permit line says $800+, the contractor is marking up pass-through costs (which they're not supposed to).
"Ice and water shield" upgrade. Fair cost ~$0.35-0.65/sq ft installed. If charged $1.50+/sq ft, flagged.
Roof deck replacement. Often sold as a "we'll only know when we're up there" line item priced at maximum; ask for an itemized rate per sheet of OSB replaced (~$65-95/sheet is fair).

Fair total job benchmark (basic tear-off + re-shingle, 2,000 sq ft roof):

Low MSA (Midwest, rural South): $8,500-$12,500
Medium MSA (Atlanta, Phoenix, Dallas): $12,000-$17,500
High MSA (SF, NYC, Boston, Seattle): $17,000-$27,000

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2. HVAC (replacement of central system)

Equipment markup (above wholesale distributor price):

Fair: 25-45% markup
High: 45-65% markup
Predatory: >65% markup

Labor rate:

Fair: $85-125/hour
High: $125-150/hour
Predatory: >$150/hour

Line items most commonly inflated:

"Custom ductwork." Pre-fab ductwork installed on rails takes 1-2 hours of labor; if you're quoted 8+ hours for "custom," ask to see the duct drawing.
Refrigerant charge. R-454B refrigerant is now standard (post-2025 phaseout of R-410A). A typical 3-ton system uses 6-8 lbs of refrigerant. Fair cost ~$25-40/lb all-in. If charged $75+/lb, flagged.
Permit + inspection fees. Usually $75-250. $500+ is markup.
"Smart thermostat" upsell. Ecobee or Nest costs $180-280 retail. If quoted at $500+, that's a 100%+ markup on a consumer product.

Fair total benchmark (3-ton AC + heat pump combo, like-for-like replacement):

Equipment: $3,200-$5,500 wholesale
Installation labor: $1,500-$3,500
Total fair range: $6,500-$11,500

Quotes above $14,000 for a simple like-for-like replacement need justification (ductwork redesign, electrical upgrade, additional refrigerant lines, etc.).

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3. Bathroom remodel (full, mid-range finishes)

Labor markup:

Fair: 25-40% markup over direct labor
High: 40-55%
Predatory: >55%

Materials markup:

Fair: 30-50%
High: 50-80%
Predatory: >80% (common on "designer" fixtures)

Line items most commonly inflated:

Demo and disposal. Fair: $600-1,200 for a standard 60 sq ft bathroom. Quotes of $2,500+ are padded.
Tile installation labor. $8-14/sq ft in low-cost MSAs; $15-25/sq ft in high-cost MSAs. Above $30/sq ft is predatory.
Plumbing rough-in. A standard 1-bath rough-in (tub, toilet, sink) is $1,800-3,200 of labor + $400-800 of fittings. Above $5,500 needs justification.
"Project management fee." A line item increasingly added in 2024-2026. Fair: 5-10% of the project. Predatory: >15%.

Fair total benchmark (full gut, mid-range finishes, 5x8 standard bathroom):

Low MSA: $9,500-$14,500
Medium MSA: $13,000-$22,000
High MSA: $20,000-$38,000

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4. Kitchen remodel (full, mid-range finishes)

Similar markup structure to bathroom but 2.5-4x higher absolute cost due to cabinetry, appliances, and larger square footage.

Line items most commonly inflated:

Cabinetry markup. A $12K wholesale cabinet order frequently shows up at $22-27K installed. 50-70% markup is the industry norm; above 80% is high.
Countertop installation. Fabrication + installation of quartz or granite is $45-75/sq ft fair; $85+/sq ft is high.
Appliance markup. Sold near MSRP is fair. Sold at "luxury markup" above MSRP is predatory — you can always buy appliances retail and have them delivered.
"Design fee." If a designer drew the plans, fair fee is $1,500-4,500 depending on scope. If there's no designer and the contractor is charging a "design fee," it's padding.

Fair total benchmark (full gut, mid-range finishes, 150 sq ft kitchen):

Low MSA: $22,000-$38,000
Medium MSA: $35,000-$60,000
High MSA: $55,000-$95,000

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5. Plumbing (repair and small projects)

Labor rate:

Fair: $85-135/hour in most MSAs
High: $135-175/hour
Predatory: >$175/hour for non-emergency work

Common scope, fair totals:

Water heater replacement (40-50 gallon tank): $1,500-2,800
Tankless water heater replacement: $3,500-6,500
Drain cleaning / snaking (main line): $250-550
Toilet replacement: $350-700
Faucet replacement: $150-350

Quotes more than 50% above these ranges need scrutiny.

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6. Electrical

Labor rate:

Fair: $75-125/hour
High: $125-175/hour
Predatory: >$175/hour

Common scope, fair totals:

Panel upgrade (100A to 200A): $2,500-4,500
New circuit install (non-trivial): $350-700
EV charger install (Level 2, 40A): $750-2,200
Whole-home surge protection: $250-550

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7. Painting (interior)

Low-skill trade with high markup variance because quality differences are invisible until post-job.

Labor rate:

Fair: $40-65/hour
High: $65-90/hour
Predatory: >$90/hour

Square-foot pricing (full-service, includes prep + paint + 2 coats):

Fair: $3-5/sq ft of wall surface
High: $5-7/sq ft
Predatory: >$7/sq ft

Line items most commonly inflated:

Paint markup. Contractor paint (Benjamin Moore Ultra Spec, Sherwin-Williams ProMar) is $35-55/gallon wholesale; marked up to $60-85 is fair; $100+ is high. A 2,000 sq ft interior uses ~12-15 gallons.
"Prep work." Legitimate prep is real. $500-1,500 for a whole-house interior is normal. $3,000+ is padded.

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8. Flooring (installation)

Materials markup:

Fair: 30-50%
High: 50-75%
Predatory: >75%

Labor rate by flooring type (installed):

Vinyl plank: $3-6/sq ft labor
Hardwood: $5-10/sq ft labor
Tile: $8-14/sq ft labor (low-cost MSA) / $15-25/sq ft (high-cost)
Carpet: $1.50-3.50/sq ft labor

Line items most commonly inflated:

Underlayment. $0.50-1.50/sq ft fair. $3+/sq ft is padded.
Subfloor prep. Only needed if subfloor is damaged. If there's a "subfloor leveling" line on a floor that's currently fine, ask why.
Removal of existing floor. Fair: $1-2.50/sq ft for most materials. Some contractors charge $4-6/sq ft for carpet removal, which is predatory unless it's glued-down.

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The 4 universal red flags across every trade

Beyond specific line items, these patterns appear across trades and always warrant scrutiny:

Red flag 1: The "single lump sum" quote

A quote that says "Kitchen remodel: $47,500" with no itemization is either lazy or hiding markup. Always demand itemization before signing. Refusal to itemize is a red flag by itself.

Red flag 2: Vague catch-alls

"Miscellaneous materials: $1,200." "Adjustments as needed: $850." "Contingency: $2,500." Any line item that doesn't have a specific named scope is hiding markup.

Red flag 3: Cash discounts > 10%

"We'll take $3,000 off if you pay cash." At that discount level, something is off. Either (a) they're avoiding tax reporting (your problem if IRS audits), or (b) their real margin is much higher than you thought. Neither is good.

Red flag 4: High-pressure sign-today discounts

"This price is only good if you sign today." Legitimate contractors price their work fairly and don't need artificial urgency. This is a sales technique, not a pricing strategy.

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The 3-quote rule still works (but there's a faster path)

The classic advice: get 3 quotes, take the median. This works — and for any project over $20,000 you should still do it.

But for mid-sized projects ($5,000-20,000), the 3-quote process takes 2-3 weeks and contractors frequently ghost. A faster alternative: take the quote you have, check every line item against the ranges in this guide, and negotiate the outliers. That process takes an afternoon and captures 70% of the value of 3 quotes.

This is what Is My Quote Fair? does — automates the per-line-item check against regional rates for your zip code in about 30 seconds. But the numbers in this guide are the underlying data. You can do it manually with an afternoon and a spreadsheet if you want.

Final thought: predatory pricing concentrates where information asymmetry is greatest

Homeowners who have renovated before, or who work in adjacent trades, rarely get predatory quotes. The people who get hit worst are:

First-time homebuyers
Elderly homeowners
People in a hurry (post-storm, mid-move, mid-emergency)
People who don't speak the language of the contractor fluently

None of these factors have anything to do with intelligence — they're all information problems. The fix is always the same: get itemization, compare line items against known ranges, and don't sign urgency-based contracts.

Sources

Qualified Remodeler 2024 State of the Industry report
National Association of Home Builders (NAHB) member pricing surveys
Angi / HomeAdvisor quarterly national pricing data
BLS Occupational Employment and Wage Statistics for regional labor rates
Harvard Joint Center for Housing Studies LIRA (Leading Indicator of Remodeling Activity) reports