How to Calculate the Cost on Electrical Installation

Developing an accurate cost estimate is the first step in a successful electrical job. A contractor who estimates poorly will ultimately fail, no matter how good his technical skills. If he underestimates his costs, he will find himself either using his own funds to complete a job, returning to his client to ask for more money or leaving the job incomplete or completed poorly. Overestimating will put him at a competitive disadvantage and cause him to lose work to better estimators. Estimating is not difficult but it does require practice and attention to detail.

Review the building plans to calculate the square footage of the building and the size of its electrical service. Calculate number and type of electrical outlets, light fixtures and switches needed to do the job (takeoff). Contact the municipal electrical office to determine permit fees.

Visit the "pro desk" of a home improvement retailer or electrical supply house to price the materials required to complete the job. "Pro desks" and supply houses are used to dealing with larger orders and are more efficient and less expensive than smaller stores.

Estimate the amount of time the job will take to complete. Multiply the hourly wage rates of the workers who will be doing the job by the number of workers to determine labor costs.

Calculate an overhead percentage to cover expenses related to the job (office expenses, utilities, insurance, managerial salaries).

Add permit fees, material costs, labor costs and overhead to determine the total cost. Multiply total cost by desired profit percentage (10 to 30 percent is acceptable) and add profit to total cost.


  • Always add a cushion for labor costs.