How much is the average construction management fee?

A construction manager supervises a building project for the property owner and ensures smooth progress on the job site. Initially designed for large commercial projects, this role is now utilized for single-family homes and other residential projects as well. But, what is the average construction management fee? 

And, are the project management fees based on an hourly basis or a flat fee? Which factors of the construction project affect the fee structure? Let’s find all the answers here.  

Who is a construction manager? 

A construction manager (CM) oversees projects from start to finish, working closely with property developers, owners, architects, engineers, and subcontractors to ensure timely, budget-friendly, safe, and quality construction. 

Interestingly, some construction managers are licensed architects while some are general contractors. 

What does a construction manager do?

The primary responsibility of a construction manager is to be the owner’s representative and avoid unnecessary expenses. They have to ensure that subcontractor work aligns with plans and schedules. Plus, they handle tasks such as managing construction documents, contractor bidding, and administration. Their role involves: 

• Evaluating construction plans
• Soliciting bids and negotiating terms
• Handling permits and approving change orders
• Hiring subcontractors and scheduling tasks
• Troubleshooting, cost estimating, and material procurement

When should you hire a construction manager?

If you do not have any construction experience or time to supervise as your own general contractor, hiring a construction manager is a wise choice. They act as your on-site representative, handling issues and ensuring honesty. Projects with significant subcontractor involvement and complex coordination benefit from their expertise.

What is the average construction management fee?

Construction managers typically charge a fee ranging from three to 15 percent of the total project cost. However, some may impose a five percent fee and mark up materials and labor by 10 percent. Therefore, for minor renovations, costs may start from $3,000, while larger projects such as building a new home could exceed $49,000.

Sometimes, construction management contracts are simple: you’ll typically pay one flat fee based on the project size, cost, and time for completion.

For certain projects, construction managers might bill hourly during the design phase until determining a percentage-based fee for the entire project cost. 

What are the factors that affect the total construction management fees?

Several factors collectively shape the total construction management fees and should be considered when planning and budgeting for construction projects.

CM fee structure

While charging a percentage of the total renovation cost is common, construction managers offer various fee structures. For projects, with extended design phases, they may bill hourly until determining a percentage-based fee. 

Alternatively, a flat fee for specific project phases or the entire task upfront may be preferable. Construction managers may also segment payments into phases, such as design and construction, or request an upfront fee to cover potential charges.

Project value

Construction managers generally charge higher percentages for smaller projects compared to larger ones. For projects valued under $1 million, which includes most residential builds, the fee typically ranges from 5% to 15% of the project’s value. Say, you have a $150,000 project, the construction manager fee can be anywhere between $7,500 to $22,500

For projects valued between $1 million and $10 million, construction managers typically charge 5% to 9%. And, for projects exceeding $10 million, the fee may be as low as 1% to 5%.

Scope of the project

Needless to say, the role, responsibility, and fees of a CM depend on what you want them to do. For instance, if you want them to search, interview, and hire subcontractors, take care of contractor insurance, or get building permits, the construction manager can handle all that – albeit for a higher cost. 

Project type

Different projects entail varying fees. 

For instance, for a kitchen remodel with an average cost of $40,000, the fees range from $2,000 to $6,000. A room addition averaging $170 to $200 per square foot could mean fees of $1,125 to $3,980. For remodeling multiple bedrooms ranging from $18,500 to $75,000, the management fees could vary from $930 to $11,350 based on project size, and complexity.

For building a new house (in the cost range of $150,000 to $450,000), you could expect the fees to be between $7,550 and $67,550.

Other factors

The project location plays a significant role as construction costs and market conditions vary across different regions. All these impact the fees charged by construction managers.

Also, project timelines affect fees. Projects requiring tight deadlines or accelerated schedules often necessitate additional resources and effort from the construction manager, leading to higher fees. 

Additionally, the level of experience and expertise of the construction manager is a key determinant. A more experienced and specialized manager may command higher fees due to their proven track record and expertise in handling complex projects. 

Construction manager fees vs. general contractor fees: What is the difference?

Construction managers and general contractors, while similar, have distinct approaches and fee structures. General contractors typically charge between 10% and 25% of a project cost. They oversee the project, hire and manage on-site teams, allocate material budgets, and ensure successful construction. Their involvement is hands-on and high-risk, leading to higher prices. 

On the other hand, construction managers charge a flat fee based on a percentage of construction costs. As mentioned, it’s generally 5% to 15% of the project’s cost. Hourly fees are also an option, ranging from $50 to $100 per hour or more, depending on expertise and responsibilities. Construction managers carry less risk compared to general contractors, as owners bear responsibility for job-site issues and cost overruns. This risk difference results in lower fees for construction managers compared to general contractors.

Last thoughts

Construction costs account for the majority of the costs associated with building a new property. If you want to estimate the cost of your construction project, you can utilize Kukun’s Renovation Cost Estimator for quick and reliable results. 

When it comes to construction management costs, the fees can range from 3% to 15% of the construction cost. Keep in mind that a construction manager is a vital part of the process. They are tasked with scheduling, budgeting, quality control, safety compliance, and overall project management to ensure successful outcomes. And, their expertise spans various construction sectors, including residential, commercial, industrial, and infrastructure projects.

Written by Ramona Sinha. October 17, 2025

Ramona is the Senior Content Writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. She has written articles covering a broad range of topics, such as real estate, lending and mortgage, finance, business, taxation, home designs, home improvement projects, decor concepts, and more. An avid traveler, she’s a digital nomad at heart and an animal lover from the depth of her soul.