How Much Are Construction Manager or Project Manager Fees?

Standard Construction Manager Fee Percentage

Standard construction manager fees range from 5% to 15% of the project total. However, costs can also come as a fixed amount or based on the size of the build. They will also vary with the services that the Construction Manager, or CM, provides. You should pay the fees based on the completion of specific phases of work. Structure payments so that everything paid in full once the work is complete.

TIP: Pay attention to the cost of materials and labor when reviewing your estimate or contract. If the CM marks up these factors, that may impact the overall percentage you’re paying for their services. Such markups might take a CM’s rate up from 5% to 15%.

Construction Manager Fee Scale

The industry standard for construction manager fees ranges from 1% to 15% of the total cost depending on the scale and scope of the job. You’re more likely to see a 1 percent fee if your total costs are over $100 million.

Typical Construction Project Management Fee Structure

Construction project manager fees will be either fixed, a percentage of the overall costs or calculated by the size of the build. Typically, they are 5% to 15% for small-scale projects. For larger jobs, they’re more likely to be 5% or less.

• Fixed: Based on the hours the manager will spend on the project overall. You’ll pay the fee in monthly installments. This rate ranges vastly depending on the type of project.

• Percentage:

  • 5-15% of the total price for small projects (typically under $500,000).

  • 5% or less for large-scale jobs ($500,000 to $5 million and more).

• Size: Some managers charge based on the square footage and the total price.

Construction project managers help homeowners or property owners to achieve objectives beyond just construction, helping them plan for their larger goals for the home or building. Learn more about the difference between construction managers and project managers.

Renovation Project Manager Costs

On renovation projects, the manager’s fee is likely to range from 5% to 20% of the total cost, depending on the extent of their services. Renovation project managers are more similar to Project Managers than Construction Managers. Learn more about renovation project managers.

Commercial Project Manager Fees

On commercial projects, the manager’s fees are likely to range from 1% to 5% of the overall price. Commercial projects are typically higher in cost compared to residential, making the percentage fee lower.

Residential Construction Consultant Fees

Expect to pay either a percentage of the cost - usually lower than 5% per consult - or a flat fee for residential consultation services.

When it comes to residential construction, you’ll likely need to consult with several professionals before work starts. These include construction managers, structural engineers, architects, landscape architects and designers.

What is Construction Management?

Construction management is a professional field that focuses on each part of the building process. It typically involves commercial building sites or multi-unit residential sites, not usually single-family residential building sites. They

• Oversee each phase of work.

• Resolve any discrepancies between original blueprint design and actual implementation.

• Are accountable for cost and must control material and labor prices.

• May work with one or more:

  • General contractors

  • Project managers

  • Architects

  • Site-specific superintendents

• Must be familiar with design and building laws such as OSHA regulations and building codes.

Construction Management vs. Project Management

These professionals overlap in many areas, but there are a few key differences.

Construction Managers oversees factors that have to do with building and construction.

Project Managers oversees every detail from visualization to completion.

• Manage security, tech and amenities

• Focus on the owner’s greater objectives

• Responsible for hiring construction managers

Both Professionals

• Act as the owner’s representative and advisor

• Are responsible for hiring and managing subcontractors

• Accept liability for staying within budget and on time

General Contractor Rates vs. Construction Management Fees

A general contractor (GC) will charge a higher rate than managers for their services, closer to 10% to 20% of the overall cost versus 5% to 15% for CMs.

A GC will:

• Pay for supplies, materials and labor.

• Determine costs and markups on all services for one overall price.

Can act as a construction manager and participate in pre-construction planning.

• Manage your job from start to finish.

• Hire subcontractors and other workers.

• Lease vehicles (trucks, cranes, backhoes, etc.).

• Maintain all accounting and personnel records.

• Accept total liability for the work at hand.

• May cover delays and issues out of pocket, depending on circumstances.

Hiring a general contractor is more likely to mean you’ll have a consistent, reliable crew of workers or subcontractors who are used to working with that GC and team.

FAQs

What is a Foreman and what are his or her rates?

A foreman is a supervisor on the job site. Their rate is usually included in your estimated project cost, along with other labor costs, at $80 per hour and more. This factors in salary, insurance and overhead. The foreman reports to the construction manager and/or supervisor and oversees workers. On a job site, they:

• Assess blueprints to determine priorities

• Assign tasks and responsibilities

• Oversee quality of work

• Evaluate progress regularly

• Manage delays and equipment issues

• Ensure site safety

What is a construction supervisor?

A construction supervisor oversees workers, subcontractors and foremen on the job site. A supervisor is less hands-on than a foreman, but some of their duties overlap. It’s their responsibility to:

• Hire and train workers

• Oversee team of foremen and workers

• Maintain positive and productive worksite

• Ensure quality work

• Keep track of budget

• Implement and maintain proper safety standards

What can I expect from a construction management contract?

A construction management contract should:

• Detail the scope of the project

• List the agreed-upon rates and prices

• Distinguish the responsibilities of the manager

• Outline the agreed-upon payment schedule and timeline for the work.

There are several types of contracts which match to the fee type, such as fixed price or percentage.

What is the average pay for a construction manager per project?

With a fee of 5% to 15%, the construction manager’s pay per project varies.

• Small-Scale, $500,000 job: $25,000-$75,000.

• Large, $5,000,000 project: $250,000 or less.

According to the Bureau of Labor Statistics, they make around $45 per hour and over $93,000 per year.