The cost of running a restoration company is higher than most owners realize, and the structure is different from general construction. Workers' comp at $8–$18 per $100 of payroll (vs. $4–$7 for construction), Xactimate licensing at $150–$350/seat/month, specialized GL insurance, ongoing IICRC certification, and equipment capital costs stack overhead to 22–32% of revenue before owner compensation. This report benchmarks every major cost category — labor, equipment, insurance, software, certification, vehicles, and marketing — with sourced dollar figures and percentage-of-revenue benchmarks.
Last updated: May 2026. Data sourced from RIA CODB, BLS wage data, NCCI classification data, franchise FDDs, and vendor pricing.
Methodology and Sources
Cost benchmarks in this report are sourced from:
- RIA Cost of Doing Business (CODB) Report — Annual member survey covering every major cost category by company size. Primary source for overhead percentage benchmarks.
- Bureau of Labor Statistics (BLS) — Occupational Employment and Wage Statistics (OEWS) for restoration-related job classifications. National Compensation Survey for benefits cost data.
- NCCI (National Council on Compensation Insurance) — Workers' compensation classification codes and rate guidance. State-specific rates sourced from individual state rate filings.
- Cleanfax State of the Cleaning & Restoration Industry — Annual survey covering cost categories and operating benchmarks.
- Franchise Disclosure Documents (FDDs) — Servpro, PuroClean, Rainbow International, and ServiceMaster Restore FDDs include operating cost data for franchisees (disclosed as required by FTC regulations).
- Vendor pricing — Equipment manufacturer price lists (Dri-Eaz, Phoenix, Alorair, Xergy), software subscription pricing (Verisk/Xactimate, QBO, job management platforms).
- IICRC — Certification and registration fee schedule (published).
- Industry insurance brokers — Restoration-specific GL, workers' comp, and E&O premium benchmarks.
Key Findings
- Total overhead (G&A, not including direct costs): 22–32% of revenue (declining with scale)
- Workers' comp for restoration technicians: $8–$18 per $100 of payroll (vs. $4–$7 for construction)
- Annual Xactimate license per user: $1,800–$4,200/year
- Full software stack cost for a $2M company: $15,000–$30,000/year
- Equipment capital investment for a $1M mitigation company: $150,000–$300,000+
- General liability insurance for a $2M company: $8,000–$20,000/year
- IICRC firm certification (5 techs, 3 specialties, annual maintenance): $3,000–$7,000/year
- Vehicle costs as % of revenue: 3–6%
- Marketing spend as % of revenue: 1–6% (varies by channel strategy)
- Estimated total overhead cost for $2M company (illustrative): $440,000–$640,000/year
Section 1: Labor Costs — The Largest Single Cost
Direct labor is the largest single cost in most restoration companies — running 28–38% of revenue inclusive of burden. But the headline hourly wage is only part of the cost picture.
Workers' compensation — the hidden labor cost:
Full burden rate calculation: A restoration company with $25/hr technicians needs to calculate full labor burden before allocating to job costs:
| Burden Component | Rate | $ Per Hour | |---|---|---| | Base wage | — | $25.00 | | FICA (Social Security + Medicare) | 7.65% | $1.91 | | FUTA / SUTA (state unemployment) | ~3% | $0.75 | | Workers' compensation (midpoint $12/$100) | 12% | $3.00 | | General liability allocation | ~2% | $0.50 | | Benefits (health insurance, PTO, 401k) | ~12% | $3.00 | | Total burdened labor cost | — | $34.16/hr | | Effective burden rate | 37% | — |
Burden rates of 30–40% on top of base wage are typical for restoration companies. Companies using standard construction burden rates (20–25%) systematically understate their labor cost on jobs.
Regional wage benchmarks (technician level):
| Region | Hourly Wage Range | Notes | |---|---|---| | Pacific Coast (CA, OR, WA) | $24–$35 | California prevailing wage requirements in some markets; high cost of living | | Northeast (NY, NJ, CT, MA) | $22–$32 | High cost markets, strong union presence in some areas | | Mid-Atlantic (DC, MD, VA, PA) | $20–$28 | Variable; urban markets higher | | Southeast (FL, GA, NC, SC, TX, AL) | $18–$24 | Lower cost of living; high CAT market competition affects rates | | Midwest (OH, MI, IN, IL, MN, WI) | $19–$26 | Moderate cost; freeze season creates seasonal wage pressure | | Mountain West (CO, AZ, NV, UT) | $20–$28 | Growing markets; wildfire season creates surge demand |
Sources: BLS OEWS regional data, 2023; industry wage surveys.
Section 2: Equipment Capital Costs
Mitigation equipment is a capital-intensive investment. A $1M mitigation company typically needs $150,000–$300,000 in equipment to serve its market effectively.
Annual equipment depreciation (IRS Section 179 / MACRS): Restoration equipment depreciates over 5 years under MACRS or can be fully expensed in year 1 under Section 179 (subject to IRS limitations). For a $2M company with $250,000 in equipment, straight-line 5-year depreciation generates $50,000/year in equipment expense — or it can be taken as a lump Section 179 deduction in the purchase year.
Section 3: Insurance Costs
Insurance is a significant and often underestimated overhead cost for restoration companies, driven by the hazardous conditions and potential long-tail claims.
Section 4: Software and Technology Costs
Restoration companies have a higher software overhead than general contractors because of the specialization of their workflows (estimating, drying documentation, job management, accounting).
Full software stack cost:
| Tool | Function | Annual Cost (1–3 users) | |---|---|---| | Xactimate (2 users) | Insurance estimating | $3,600–$8,400 | | Job management platform | Job tracking, CRM | $2,400–$7,200 | | QuickBooks Online | Accounting | $1,200–$2,400 | | Drying documentation | Moisture logging, IICRC compliance | $2,400–$7,200 | | Encircle / field documentation | Photo documentation, contents | $1,200–$3,600 | | Payroll platform (Gusto, ADP, Paychex) | Payroll processing | $2,400–$6,000 | | CRM / business development tool | Relationship tracking | $600–$2,400 | | Total software stack | — | $13,800–$37,200 |
Sources: Individual vendor pricing as of 2024–2025. Prices vary by subscription tier, user count, and negotiated contracts.
Section 5: IICRC Certification Costs
IICRC certifications are both a professional requirement and a marketing asset — required by many carriers and TPA programs, and listed in preferred contractor networks as evidence of competency.
| Certification | Code | Initial Cost | Annual Maintenance (CEUs) | Typical Role | |---|---|---|---|---| | Water Damage Restoration Tech | WRT | $200–$400 | $150–$300 | All techs | | Applied Structural Drying | ASD | $400–$700 | $150–$300 | Senior techs, PMs | | Fire and Smoke Restoration Tech | FSRT | $300–$500 | $150–$300 | Fire crew | | Applied Microbial Remediation Tech | AMRT | $400–$600 | $150–$300 | Mold crew | | Contents Cleaning Tech | CCT | $300–$500 | $150–$300 | Contents crew | | Odor Control Tech | OCT | $250–$400 | $150–$300 | Fire / odor | | IICRC Firm Registration | — | $300–$600/yr | $300–$600/yr | Company-level |
Sources: IICRC fee schedule, 2024. Training course costs (required before certification exam) are additional — typically $300–$700 per course when taken through an approved IICRC training provider.
Annual certification budget for a 5-tech restoration company (5 WRT, 3 ASD, 2 FSRT, 2 AMRT, plus firm registration):
- Initial certification for all techs: $4,500–$8,000 (one-time, amortized over credential life)
- Annual maintenance (CEUs, renewals): $2,500–$5,000
- Firm registration: $300–$600
Section 6: Vehicle and Fleet Costs
Vehicle cost breakdown for a $2M company with 8 vehicles:
| Cost Component | Unit Cost | Annual Total (8 vehicles) | |---|---|---| | Lease payments or depreciation | $700/month avg | $67,200 | | Commercial auto insurance | $2,000/vehicle avg | $16,000 | | Fuel (avg $350/vehicle/month) | $350/month | $33,600 | | Maintenance and repairs | $2,000/vehicle/year | $16,000 | | Total fleet cost | — | $132,800 | | % of $2M revenue | — | 6.6% |
Section 7: Facilities and Overhead
The full overhead picture for a $2M restoration company:
| Overhead Category | % of Revenue | Annual $ Amount | |---|---|---| | Owner / management salary | 11% | $220,000 | | Administrative staff (2 FTE) | 7% | $140,000 | | Workers' comp insurance | 4% | $80,000 | | Commercial auto insurance | 0.8% | $16,000 | | General liability insurance | 0.6% | $12,000 | | Fleet: payments + fuel + maintenance | 5.8% | $116,000 | | Software stack | 1.3% | $26,000 | | IICRC certification and maintenance | 0.2% | $4,000 | | Marketing and business development | 2.5% | $50,000 | | Facilities (shop, storage) | 1.5% | $30,000 | | Other G&A (phone, supplies, professional services) | 2% | $40,000 | | Total overhead | 36.7% | $734,000 |
This is an illustrative model based on benchmark ranges. Actual figures vary by company, region, and service mix.
Section 8: Cost Trends — What's Getting More Expensive
Labor: Restoration technician wages have increased significantly since 2021, driven by the broader construction and trades labor shortage. Entry-level wages that were $14–$16/hr in 2019 are now $16–$20/hr in most markets. This trend has compressed margins at companies that haven't adjusted pricing.
Equipment: Supply chain disruptions during 2021–2022 affected equipment availability and pricing. Equipment costs have moderated somewhat since 2023 but remain above pre-2021 levels for some product categories.
Workers' comp: Workers' comp rates are state-specific and vary with EMR. Overall industry rates have been relatively stable in 2023–2025 following increases in the 2020–2022 period.
Software: Software subscription costs have increased as platforms have added features and moved to per-seat pricing. Xactimate pricing increases by Verisk have been a point of industry friction.
Insurance: GL and commercial auto insurance have seen premium increases of 8–15% annually in the 2021–2024 period across most lines, driven by industry-wide claims inflation. Restoration companies are affected by both general commercial insurance market trends and restoration-specific risk factors.
Frequently Asked Questions
What does it cost to run a restoration company?
Total operating costs for a $2M company: approximately $1.8M–$1.9M/year, leaving $100K–$200K in net profit. Largest costs: direct labor + burden (28–38%), subcontractors (8–18%), materials (5–15%), overhead (22–32%).
What do restoration technicians earn?
Entry-level: $16–$20/hr. Experienced: $20–$28/hr. Lead: $25–$35/hr. PM: $55,000–$90,000/year. Regional variation is 15–25%. Source: BLS OEWS, 2023.
What is workers' comp for restoration?
$8–$18 per $100 of payroll — compared to $4–$7 for standard construction. Annual cost for a $2M company with $600K direct labor: $48,000–$108,000.
How much does restoration equipment cost?
Air mover: $500–$1,200. LGR dehumidifier: $3,000–$8,000. Air scrubber: $1,500–$4,000. Full mitigation capability for a $1M company: $150,000–$300,000 in equipment investment.
What does the software stack cost annually?
$14,000–$37,000/year for a full stack: Xactimate ($1,800–$8,400), job management ($2,400–$7,200), QBO ($1,200–$2,400), drying documentation ($2,400–$7,200), payroll, field documentation.
What does GL insurance cost?
$8,000–$20,000/year for a $2M company. Higher for mold and fire work. Source: industry insurance broker benchmarks, 2024.
What do IICRC certifications cost?
WRT: $200–$400. ASD: $400–$700. FSRT: $300–$500. AMRT: $400–$600. Annual maintenance for a 5-tech company: $2,500–$5,000 plus firm registration.
What do vehicle costs run?
3–6% of revenue. For a $2M company with 8 vehicles: approximately $130,000–$140,000/year (payments + insurance + fuel + maintenance).
How does restoration overhead compare to general construction?
Higher — typically 22–32% vs. 15–20% for general construction. Driven by higher workers' comp rates, specialized software requirements, IICRC certification, and higher GL premiums for pollution/contamination risk.
What's getting more expensive?
Labor (15–25% wage increases since 2019), GL and commercial auto insurance (8–15%/year increases in 2021–2024), software (Xactimate price increases), and workers' comp (stable in 2023–2025 after earlier increases).
Source Bibliography
- RIA Cost of Doing Business Report — Primary source for overhead percentage benchmarks by category and company size. restorationindustry.org
- Bureau of Labor Statistics (BLS) — OEWS wage data for restoration-related occupations; National Compensation Survey for benefits data. bls.gov
- NCCI — Workers' compensation classification codes and base rate guidance. ncci.com
- IICRC — Certification and registration fee schedule. iicrc.org
- Cleanfax Magazine — State of the Cleaning & Restoration Industry (annual survey). cleanfax.com
- Verisk / Xactimate — Subscription pricing and estimating platform cost. verisk.com
- Servpro FDD — Franchisee operating cost disclosures. Filed with FTC, 2023.
- PuroClean FDD — Franchisee operating cost disclosures. Filed with FTC, 2023.
- Equipment manufacturers — Dri-Eaz (Legend Brands), Phoenix Restoration Equipment, Alorair, Xergy — published pricing lists, 2024.
- Industry insurance brokers — GL, workers' comp, and commercial auto benchmark premiums for restoration contractors, 2024.
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