A unit rate is built up from six parts — material, labour, water charges, CPOH (≈15%), cess, and GST (18%). Add material + labour first, layer the percentages on top, and apply GST last. This guide shows the exact order with a worked example.
Rate analysis is the process of working out the cost of one unit of an item of work — one cubic metre of concrete, one square metre of plaster — by adding up everything that goes into it. This guide walks through the components and the exact order in which they build up to the final rate.
What is rate analysis?
Every estimate is a list of items with a quantity and a unit rate. Rate analysis (also called Analysis of Rates, or AoR) is how that unit rate is derived. For standard items you can take the rate straight from the DSR; for items not in the schedule you analyse them yourself as NSR items. Either way, the build-up is the same.
The components of a unit rate
A civil rate is assembled from these components, in this order:
Rate = Material + Labour + Water charges + CPOH + Cess + GST- Material cost — quantity of each material for one unit of work, multiplied by its current basic rate (cement, steel, sand, aggregate, bricks, etc.), including a wastage allowance.
- Labour cost — the labour output required for one unit, priced using the notified minimum wages (basic + VDA) for each category (mason, beldar, bhishti, and so on).
- Water charges — a small percentage added for water used in construction, where applicable.
- Contractor's Profit & Overheads (CPOH) — a standard margin for site establishment, supervision, and profit. CPWD conventionally uses 15%. See the full CPOH guide for what it covers and a worked calculation.
- Cess — statutory labour welfare cess and similar levies.
- GST — applied on the finished rate; works contracts currently attract 18%.
Step-by-step method
Step 1 — Break the item into materials and labour
Take a defined quantity (usually per m³, m², or per unit) and list the material quantities and the labour categories with their outputs. Standard coefficients for these come from the DSR's analysis and IS codes.
Step 2 — Price the materials
Multiply each material quantity by its current basic rate (before GST). For NSR items, use current market quotations; for DSR items, the edition's basic rates apply.
Step 3 — Price the labour
Multiply each labour output by the applicable wage. Because wages revise every six months with the variable dearness allowance, always use the current minimum wage notification.
Step 4 — Add water charges, CPOH, cess, then GST
Sum material + labour, add water charges, then apply CPOH (typically 15%), add cess, and finally apply GST on the finished rate. The result is your unit rate.
Worked example — 1 m³ of an item where material + labour comes to ₹6,000:
(Before water charges and cess, which vary by item.) Mulyankan performs this build-up automatically and shows every component.
Why a tool helps
The tedious part of manual rate analysis is that changing one basic price — say cement — means re-computing every item that uses it. A tool recalculates all dependent items instantly while keeping each component visible and auditable, so your estimate stays consistent and defensible during tender scrutiny.
Do it live: analyse DSR items or build a custom NS item, free — then download the finished rate analysis and abstract as a PDF.