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Why a Construction Company Charges $85 an Hour for a Guy Who Makes $30
Builders and contracts Pricing From a builder
Why a Construction Company Charges $85 an Hour for a Guy Who Makes $30
I get asked this often enough that I wrote it down. Our charge-out rate is the same for every person on the site, foreman or labourer: $60 an hour, plus 10 percent overhead, plus 15 percent profit, plus HST, which lands at about $85. Nobody on my crew takes home $85 an hour. Here is where the rest goes.
Short version: The hourly rate on your invoice covers the wage, the payroll costs on top of it (WSIB, CPP, EI, vacation pay, statutory holidays), the truck, fuel and insurance that carry the worker to your site, the tools and their replacement, the hours nobody can bill (driving, quoting, paperwork, rain days), the office, the liability insurance, and then overhead and profit so the business is still there to honour the warranty. The old human-resources rule that an employee costs about three times their take-home pay is roughly right in construction. A rate that is far below the market is usually missing one of those lines, and you will find out which one.
Start with the wage
A good framer or finisher in Simcoe County in 2026 is paid somewhere in the $28 to $40 an hour range, a labourer less, a lead hand more. Union carpenter rates in Toronto are higher again. That is the number the worker sees. It is not the number the company pays.
What the company pays on top of the wage
| Cost | What it is | Rough share of wage |
|---|---|---|
| WSIB | Workplace injury insurance; mandatory in construction, rated by trade | 5 to 12 percent |
| CPP and EI employer contributions | Payroll deductions the employer matches or exceeds | About 7 to 8 percent |
| Vacation pay and statutory holidays | Four percent minimum plus nine paid holidays | 6 to 8 percent |
| Benefits | Health and dental where offered | 3 to 8 percent |
| Drive time | Paid hours in the truck to and from a rural site | 10 to 20 percent of a day |
| Training, safety, certifications | Working at heights, WHMIS, first aid, renewals | 1 to 3 percent |
Before anyone picks up a hammer, the $30 wage is a $38 to $42 cost. WSIB and the Employment Standards Act are not optional; a contractor who tells you his guys are all “subcontractors” paid cash is passing you a risk, not a saving.
Then the things the worker needs to do the job
- A truck and trailer: payments or depreciation, commercial insurance, fuel, tires, repairs. A crew truck is easily $15,000 to $25,000 a year to keep on the road.
- Tools: saws, nailers, compressors, levels, ladders, scaffold, and the replacement of all of it on a schedule, because tools on a job site have a short life.
- Consumables: blades, bits, fasteners, string line, tarps, the stuff nobody invoices.
- Liability insurance on the business, which a homeowner should ask to see.
- The office: phone, software, bookkeeping, the accountant, the HCRA licence and Tarion enrolment for builders, the website you found us on.
The hours nobody can bill
An eight-hour day on site is not eight billable hours. There is the drive, the morning at the lumberyard, the estimate on the way home, the call with the inspector, the rain day, the day the concrete truck is late. A small contractor working sixty hours a week is lucky to bill forty. Every unbillable hour has to be carried by the billable ones.
Overhead and profit, and why you want them
On top of direct cost we add 10 percent overhead and 15 percent profit, and we have for decades. Overhead keeps the lights on. Profit is what the company retains to buy the next truck, carry a slow winter, and be in business in year six when your warranty claim comes in. A contractor with no margin is a contractor who will be gone, or who will make the margin up on your change orders. When the builder wants more money is the usual second act.
The human-resources rule of thumb that an employee costs about three times take-home pay holds up in construction. $30 in the hand, $85 on the invoice, and the gap is not greed; it is the cost of a crew that shows up insured, equipped and still employed next year.
How to use this when you compare quotes
- Ask for the charge-out rate and what it includes. A rate with no WSIB, no insurance and no overhead is not a lower price; it is a different risk.
- Check the WSIB clearance certificate and the liability insurance; both take a minute. Verifying a contractor before signing lists the rest.
- Compare the total, not the rate. A faster crew at $85 beats a slower one at $65 every time.
- For a whole house, insist on a fixed price or a cost-plus contract with the percentage written down. Fixed price vs cost plus explains both.
Related guides on this site
Sources and further reading
Questions people ask
Why do contractors charge so much per hour?
Because the hourly rate carries the wage plus WSIB, CPP, EI, vacation and holiday pay, the truck, tools, insurance, the hours that cannot be billed, the office, and overhead and profit. An employee costs the company roughly three times their take-home pay.
What is a fair hourly rate for a construction worker in Ontario in 2026?
Charge-out rates for a general construction crew commonly run $65 to $95 an hour plus HST, higher for licensed trades. A rate far below that usually means something is missing: insurance, WSIB or a legitimate payroll.
Do contractors pay WSIB in Ontario?
Construction is a compulsory-coverage industry; contractors with workers must register and pay WSIB premiums, and you can ask for a clearance certificate before work starts.
Before you sign anything
Run the contract through our free checker; it flags the clauses that cause most of the arguments we get called about. Building with us? The contract comes with the clauses already in it.
Reviewed and updated October 2026. Costs are Ontario ranges, not quotes; code references are to the Ontario Building Code in force at that date.
I completely agree with you on the point that hiring someone actually costs about three times their take-home pay. It’s totally justified in my opinion.
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I think it is a big responsibility, lot of risks and lot of equipment. Today you can add to it modern software like https://fluix.io/safety-management and tons of permissions that require time and efforts
I agree with your point. Construction workers do incredibly hard work and they should be compensated accordingly. Thanks for sharing.
It’s tough to believe that some people don’t understand that a contractor business needs to pay salaries and equipment, that’s why their prices can be high. Good article
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cover the same topics talked about in this article? I’d really like to be a part of online community where
I can get opinions from other knowledgeable individuals that
share the same interest. If you have any suggestions, please let me know.
Thank you!