Your salary isn't in your overhead
You take draws when cash allows. That means your own pay is invisible in every bid you write.
If your compensation isn't a fixed line in overhead, the overhead rate is understated by that amount and every bid you write carries the error. Draws make year over year comparison meaningless too, since the number moves with cash rather than with cost. You end up bidding against competitors who did put the owner's pay in the rate, and you win the job by underpricing your own labor. Winning that way costs you money on every job you take.
Three moves, in order
Step 03: Overhead calculation
What indirect cost really comes to at your size, and the rate your estimating template should be carrying.
Other problems step 03 solves
Other things that go wrong
What owners ask
Should owner salary be in construction overhead?
You take draws when cash allows. That means your own pay is invisible in every bid you write. If your compensation isn't a fixed line in overhead, the overhead rate is understated by that amount and every bid you write carries the error. Draws make year over year comparison meaningless too, since the number moves with cash rather than with cost. You end up bidding against competitors who did put the owner's pay in the rate, and you win the job by underpricing your own labor. Winning that way costs you money on every job you take.
Which part of the system fixes this?
The step is number 03, overhead calculation. What indirect cost really comes to at your size, and the rate your estimating template should be carrying. It's drawn from chapter 3 of CONTROL: The Construction Financial Operating System.
Is this normal for my trade?
Across the 48 trades in the benchmark reference, net profit at $1M–$5M averages 7% before taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack sits, and your own job costing tells you where you sit, which is the number that pays payroll.
Where do I start?
Set a market salary for the work you do in the business and put it in overhead.
Can I fix this without touching anything else?
You can try, and it doesn't hold. Step 03 depends on step 01, job cost structure and step 02, equipment cost basis. Install it ahead of those and it produces numbers nobody trusts, which is worse than the problem you started with.
Josh Luebker ran commercial construction projects before he ran the numbers behind them, on data centres, military bases, hospitals, and high-rises. He wrote CONTROL: The Construction Financial Operating System, which is an eight-step framework for commercial subcontractors, and it publishes on October 1, 2026. He is a master electrician who moved into the office and kept the field vocabulary.
Sulphur Prairie Operations LLC maintains the benchmark reference behind these figures. Every edition is reconciled against the newest CFMA survey release before it publishes here. Where a figure changes between editions, the older edition keeps its year in the title so a citation to it stays correct.