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What does a general contractor charge in Los Angeles?
General contractors in Los Angeles typically charge an overhead-and-profit markup of roughly 15 to 25 percent on top of labor, materials and subcontractor costs, whether it appears as a line item in a cost-plus contract or is built into a fixed price. On a $100,000 remodel that is usually $15,000 to $25,000 of the total, and it pays for scheduling, permits, inspections, subcontractor management, warranty and the contractor's liability for the finished work.
| Typical overhead and profit | Roughly 15 – 25 percent |
|---|---|
| On a $100,000 remodel | Roughly $15,000 – $25,000 |
| Legal maximum down payment | $1,000 or 10 percent, whichever is less |
| Verify a license | cslb.ca.gov → Check a License |
The two ways contractors price
Fixed price (lump sum). One number for a defined scope. The contractor carries the risk of labor and material swings and prices that risk into the number. Changes to the scope are handled by written change orders. This is the most common structure for residential remodels and the easiest to compare between bids, as long as the scopes match.
Cost plus. You pay actual costs plus an agreed fee, often 15 to 25 percent, sometimes a fixed management fee. It is transparent and flexible, and it works best for projects where the scope cannot be fully known up front, such as restorations of older homes. The risk shifts to the homeowner, so a guaranteed maximum price is worth negotiating.
What the markup covers
Estimating and preconstruction, permits and inspections, scheduling and supervising subcontractors, ordering and protecting materials, site cleanliness and safety, insurance, warranty service and the legal responsibility for the finished work. A quote with a markup well below the typical range usually means something is missing from the scope or the contractor is not carrying proper insurance.
California rules that protect you
Home improvement contracts in California must be in writing, the down payment may not exceed $1,000 or 10 percent of the contract price, whichever is less, and progress payments must follow work actually performed or materials actually delivered. Verify the license on the CSLB website before signing. Oria Builders (CSLB #1029255) works on written fixed-price contracts with a payment schedule tied to construction milestones.
Related Questions
Is cost plus or fixed price cheaper?
Neither is cheaper by design. Fixed price gives certainty and prices in risk; cost plus gives transparency and shifts risk to you. The scope definition matters more than the contract type.
Should I always take the lowest bid?
Compare what is in each bid first. The lowest number is often missing permits, engineering, allowances or finish items that appear later as change orders.
What should a contractor's estimate include?
A written scope, allowances with amounts, exclusions, a payment schedule that follows the law, the license number, and a start and completion window.
Sources
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Answered by Gilad Segev — Founder & Licensed General Contractor, Oria Builders (CSLB #1029255). Last updated October 2, 2026.