Construction Prevailing Wage Impact Calculator

Prevailing wage adds 8–25% to labor cost on public/affordable housing projects.

Construction cost

Labor share %

PW premium %

Compliance cost

Total PW impact

$875,000

Wage premium cost

$800,000

% of construction

0.09%

How the math works

Premium = construction × labor share × PW premium %. Total = premium + compliance.

$10M × 40% × 20% = $800k premium + $75k compliance = $875k = 8.75% PW impact.

How to Use

Enter construction cost.
Enter labor share %.
Enter pw premium %.
Enter compliance cost.
Read total pw impact.

Frequently Asked Questions

Davis-Bacon vs state PW?

Federal Davis-Bacon: required on federally-funded projects >$2,000 construction value. State PW: California, NY, NJ, IL, MA require for public projects, sometimes affordable housing. Premium varies by trade: ironworkers, electricians, plumbers see 30–60% wage premium vs market non-union. General laborers: 15–30%. Bookkeeping burden: certified payroll, fringe benefit verification, monthly reports. Often justified by: federal funds, public bonds, tax credit equity (LIHTC, NMTC) — required for compliance.

How does this impact project budget?

Construction budgets layer hard costs (50–65%), soft costs (15–25%), financing (5–10%), contingency (5–10%), and developer fee (3–5%). Schedule risk often equals or exceeds cost risk — every month delay carries carry cost (interest, real estate tax, insurance, opportunity cost) of 0.5–1.5% of project budget. This calculator quantifies one cost component.

Owner-controlled vs GMP vs CM-at-risk?

Lump sum/GMP: contractor takes risk above guaranteed maximum price, owner pays for change orders. CM-at-risk: open book, fee + GMP, more transparent. Construction management: agent for owner, GC subcontracted directly. Design-build: single accountability, faster but less price competition. Match delivery method to project complexity and owner sophistication.

Schedule and cost contingency?

Standard contingency: 10% of hard cost for entitlement, 5–8% for construction. Schedule contingency: 60–90 days buffer past target completion. Force majeure provisions: weather, material lead time, labor strike, permit delay. Track via critical path method (CPM) schedule. Major lender draws contingent on schedule + cost variance to budget remaining within 5%.