How to Build Health and Safety Costs Into Your Residential Construction Estimating Software
Bolster
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TLDR
Health and safety compliance is a required cost of doing business in residential construction. By tracking OHS expenses, calculating monthly and per-crew costs, and converting them into an hourly allowance, you can confidently build health and safety costs into your residential construction estimating software without hurting margins.
Why health and safety costs must be built into your estimates
If you work in the construction industry, you already know that health and safety regulations are strict and getting stricter every year. While most on-site injuries involve slips and falls, construction also carries a higher risk of serious injury.
Making sure your team gets home safe every day is a moral obligation. It is also a financial and legal necessity. Failing to comply with health and safety regulations can result in heavy fines, project shutdowns, and even criminal liability.
The challenge for many contractors is not whether to comply, but how to correctly account for those costs in their residential construction estimating software. Here is a practical way to do it.
1. Stay up to date with regulations
Health and safety compliance is not a one-time task. Regulations change regularly and vary by trade, location, and scope of work.
If you do not have a dedicated health and safety manager, schedule time every few months to review:
- Federal, state, and local safety regulations
- Trade-specific requirements
- Updates from regulators or industry bodies
Any additional time, training, or equipment required to stay compliant should be considered a real cost and included in your estimates.
2. Invest in quality PPE
Personal protective equipment includes items such as hard hats, steel-toed boots, gloves, eye protection, and respirators.
While some PPE may be purchased by workers, employers are typically required to supply certain items. Make sure you:
- Purchase compliant, certified PPE
- Track when PPE is issued
- Replace equipment as required
Quality PPE costs more upfront, but it lasts longer and reduces the risk of injury, claims, and downtime.
3. Keep detailed health and safety records
Health and safety record-keeping often feels unnecessary until it is needed. Proper records should include:
- Safety training provided to workers
- PPE issued
- Vehicle, tool, and equipment inspections
- Health and safety policies and procedures
Also track the administrative time spent managing these records. That time has a cost and should be included in your health and safety allowance.
4. Track your OHS spending
If you have never formally included safety costs in your pricing, start by reviewing your past expenses.
Look back over six to twelve months and total the following:
- First aid kits and supplies
- Health and safety training
- PPE provided to workers
- Medical or incident-related costs
- Time and tools used to manage your OHS program
This gives you a realistic baseline for what health and safety is already costing your business.
5. Calculate your average monthly costs
Once you have a total for your chosen period, divide it by the number of months to get an average monthly health and safety cost.
Next, consider upcoming changes such as:
- New regulations
- Additional training requirements
- Increased crew size
Adjust your monthly allowance as needed. Then apply your standard labor and overhead markup so the full cost is recovered through your pricing.
6. Calculate the cost per crew
If you operate multiple crews, divide your monthly health and safety cost by the number of active crews.
If some crews require additional training or equipment, adjust their allowance accordingly. The key is that the combined total across all crews covers your monthly compliance costs.
7. Convert the cost to an hourly rate
To build health and safety costs into your residential construction estimating software, convert the per-crew monthly cost into an hourly rate.
Using an average of 22 working days per month at 8 hours per day, divide the monthly crew cost by 176 hours.
This gives you an hourly health and safety allowance that can be added directly to your labor rates. When broken down this way, the cost is often lower than expected and far easier to recover consistently.
Residential construction estimating software makes this easier
One of the biggest advantages of using residential construction estimating software is that calculations like this only need to be done once.
With the right software, you can:
- Store updated labor and overhead rates
- Adjust allowances as regulations change
- Apply health and safety costs automatically to every estimate
Bolster makes it easy to build unit rates and assemblies that include time-based labor, overhead, and compliance costs. This means your estimates stay accurate, consistent, and profitable without manual recalculation.
Health and safety does not need to feel like a grudge purchase. When it is built correctly into your estimating system, it becomes a standard part of delivering high-quality work while protecting your team and your business.
