How to Start a General Contractor Business in Georgia

Georgia requires a state contractor license for any project over $2,500. That’s not a county rule or a city ordinance — it’s state law, administered by the State Licensing Board for Residential and Commercial General Contractors under the Georgia Secretary of State. If you’re doing remodels, new construction, additions, or any other project where labor and materials combined exceed $2,500, you need a license before you touch a single nail.

Some states leave contractor licensing to cities and counties. Georgia doesn’t. The state runs it, the state sets the standards, and the state will come after you if you’re operating without one. Get that straight from the start.

The good news: Georgia’s licensing system is more granular than most. Four distinct classifications let you start at a level that matches your current experience and work type — without forcing you to qualify for a full unrestricted license on day one. Here’s how to work through it.

Georgia’s Four Contractor License Classifications

The State Licensing Board issues four classifications of general contractor licenses. They’re not steps on a ladder — they’re separate licenses for different scopes of work. Pick the one that matches what you actually plan to build.

Residential-Basic

This is the entry point for most people starting out. A Residential-Basic license covers one- and two-family residences, single-family townhouses under three stories, and accessory structures like garages, sheds, and detached workshops. If your business is focused on single-family home construction, remodels, or additions — plus the occasional garage build — this classification covers everything you need.

It’s also the most accessible in terms of experience requirements (more on that below).

Residential-Light Commercial

Everything under Residential-Basic, plus multifamily buildings and light commercial construction. If you want to bid on apartment buildings, small office renovations, or retail buildouts alongside residential work, this is the right classification. You’ll need more documented experience to qualify, but it opens up a significantly larger market.

General Contractor Limited Tier

Any type of work — residential, commercial, industrial — but limited to contracts under $1,000,000. This is the classification for contractors who want flexibility across project types but aren’t yet positioned for large-scale commercial work. The contract value cap is per project, not annual revenue.

General Contractor (Unrestricted)

No restrictions on work type or contract value. Heavy commercial, industrial facilities, large-scale public projects — this classification covers everything. It also carries the highest experience and financial responsibility requirements. Most people starting a contracting business don’t need this on day one.

One number to keep in mind across all four: $2,500. That’s the threshold that triggers the licensing requirement in Georgia. It’s the combined total of labor and materials on a single project. Under $2,500, no state license is required. At $2,500 or above, you need to be licensed for the appropriate classification.

Licensing Requirements

The State Licensing Board isn’t just checking that you filed paperwork. The application process involves exams, a background check, financial documentation, and verified experience. Here’s what you’re dealing with.

Age Requirement

You must be at least 21 years old to apply. No exceptions and no workarounds.

Exams

Two exams, both administered by PSI Testing:

Trade exam — Tests your knowledge of construction practices, codes, and technical standards relevant to your license classification.
Business and law exam — Covers contracts, lien law, OSHA basics, and Georgia-specific business regulations.

Exam fee: $133. You’ll schedule and pay directly through PSI. Neither exam is trivial. The business and law exam trips up more applicants than the trade exam — budget real study time for the lien law section especially.

Background Check

You’ll submit a consent form authorizing a criminal history background check. A prior conviction doesn’t automatically disqualify you, but the board reviews each case. If you have anything in your history, address it proactively in your application rather than hoping it goes unnoticed.

Financial Responsibility

The board requires documentation proving you can financially manage a contracting business. What that documentation looks like varies by classification — higher tiers require more comprehensive financials. At minimum, you’ll need to demonstrate you’re not in serious financial distress. Have your financial statements organized before you start the application.

Tax Compliance

You must provide documentation showing you’re current on Georgia taxes. This means no outstanding tax liabilities with the Georgia Department of Revenue. Get that squared away before applying.

Experience Requirements

This is where the four classifications diverge most significantly.

Residential-Basic requires at least 2 years of documented construction experience. That experience needs to be verifiable — expect the board to want references, employment records, or other documentation.

Higher tiers require progressively more experience. Residential-Light Commercial and the General Contractor classifications require demonstrating deeper and broader experience across more complex project types.

There’s a shortcut worth knowing: a relevant degree in construction management, engineering, or architecture can substitute for a portion of the experience requirement. If you have a four-year degree in one of those fields, you’re not starting from zero on the experience count. Check the current board requirements for exactly how much credit your specific degree earns — the substitution formula varies by classification.

Application Fee and Renewal

Application fee: $310 (the application must be notarized)
Exam fee: $133
License renewal: $75 every two years

The application fee is nonrefundable. Don’t submit until your documentation is complete.

Insurance and Bonding

Georgia’s insurance requirements aren’t suggestions — they’re hard gates. You cannot get a contractor license without proof of insurance. Here’s what you need.

General Liability Insurance — The Hard Gate

Minimum $500,000 per occurrence. You must submit a signed, current certificate of insurance with your license application. The certificate needs to show the State Licensing Board for Residential and Commercial General Contractors as a certificate holder. No certificate, no license. Period.

General liability insurance at $500,000 minimum costs roughly $3,000-$10,000 per year for a small contracting operation, depending on your revenue, payroll, and the type of work you do. Residential work generally runs cheaper than commercial. Get quotes from insurers who specialize in contractors — a standard business owner’s policy won’t cover the right things.

This is the single biggest startup cost most new contractors underestimate. Budget for it before you apply.

Workers’ Compensation

Georgia requires workers’ compensation insurance when you have 3 or more employees. And Georgia’s definition of “employees” is broad — it includes officers and part-time workers. So if you hire two part-time laborers and count yourself, you’ve hit the threshold.

Workers’ comp isn’t required for a solo operation, but the moment you start building a crew, you’re on the clock to get coverage. The Georgia State Board of Workers’ Compensation oversees this. Rates vary significantly based on your payroll and the job classification codes for your workers — framing crews carry very different rates than office staff.

Commercial Auto Insurance

Your personal auto policy doesn’t cover vehicles used for business purposes. If you’re hauling equipment, driving to job sites, or towing trailers in a vehicle registered in your name, you need commercial auto coverage. This applies to leased vehicles too.

Builder’s Risk Insurance

Not required by the state, but strongly recommended for any project under active construction. Builder’s risk covers damage to structures during the construction phase — fire, storm, theft of materials on-site. Your general liability policy doesn’t cover this. Most lenders require it anyway if you’re financing a project, and sophisticated clients will ask for it.

Business Formation

The contractor license covers your legal authority to do the work. You still need a business entity, tax registrations, and local permits to operate. Here’s the full setup.

Form an LLC

Most new contractors use an LLC. It separates your personal assets from business liability — which matters a lot when you’re running job sites. Filing is $100 online at ecorp.sos.ga.gov. Mail-in filing is $110.

Annual registration runs $60 per year ($50 fee plus a mandatory $10 service fee, effective September 6, 2025). It’s due between January 1 and April 1. Miss that window and you pay a $25 late penalty.

One important note: your contractor license is separate from your LLC. The license attaches to the qualifying agent (the person who passed the exams), not the business entity. If you form a new company later, you’ll need to update your license to reflect the new entity.

Get an EIN

Free at irs.gov/ein. Takes about 10 minutes online. You need this for business bank accounts, tax filings, and payroll — get it immediately after forming your LLC.

Register with the Georgia Tax Center

gtc.dor.ga.gov is where you register for state taxes. If you sell materials directly to clients (rather than billing them through your labor contract), you may need to collect and remit sales tax. Georgia’s base sales tax rate is 4%, and local rates push the total to 7-9% depending on your county.

If you hire employees, you’ll register for employer withholding here as well. Get your registrations in order before you start paying anyone.

Local Occupation Tax Certificate

Georgia has no statewide general business license. Instead, cities and counties issue occupation tax certificates (sometimes called business licenses). You need one from whatever jurisdiction your business is based in.

Two mandatory affidavits apply to all Georgia business license applications, no exceptions:

E-Verify Affidavit (O.C.G.A. § 36-60-6): If you have 11 or more employees, you must register for the federal E-Verify program and include your user number. Fewer than 11 employees? You still have to file an exemption affidavit. There’s no way around this step.

SAVE Affidavit (O.C.G.A. § 50-36-1): Verifies your lawful presence in the United States. Requires notarization and a Secure and Verifiable Document (passport, driver’s license, etc.).

Don’t show up at your county or city licensing office without both of these ready. They’ll turn you away.

Startup Costs at a Glance

New contractors consistently underestimate what it costs to get legally operational in Georgia. Here’s a realistic breakdown.

Item	Cost
LLC filing	$100 (+ $60/year renewal)
License application fee	$310
PSI exam fee	$133
General liability insurance ($500K min)	$3,000–$10,000/year
Workers’ comp (if hiring)	Varies by payroll and job classification
Occupation tax certificate	Varies by city/county
Tools and equipment	$5,000–$50,000
Work vehicle	$15,000–$40,000

Realistic total to launch a Residential-Basic operation as a solo contractor: $10,000–$25,000, with the spread driven almost entirely by insurance costs and whether you already own tools and a truck.

The application and exam fees are fixed and relatively small. Insurance is where the real money goes — and where most people get surprised. A solo residential contractor with modest revenue might land general liability coverage at the low end of the range. Add a crew, take on commercial work, or have any prior claims, and that number climbs fast.

One thing that catches new applicants off guard: you need the insurance certificate in hand before you can submit your license application. So you’re paying for insurance before you’ve legally started working. Factor that into your launch timeline.

The Order of Operations

There’s a sequence here that matters. Get it wrong and you’ll waste time or money.

Confirm your classification — decide which of the four licenses matches your intended work
Document your experience — gather employment records, reference letters, project documentation
Form your LLC and get your EIN — handle this at ecorp.sos.ga.gov and irs.gov/ein
Register with the Georgia Tax Center — get your tax accounts set up at gtc.dor.ga.gov
Get your general liability insurance — you need the certificate before filing
Study and pass both PSI exams — trade exam and business and law exam
Submit your notarized application — $310 to the State Licensing Board with all supporting documentation
Obtain your local occupation tax certificate — with E-Verify and SAVE affidavits in hand

The contractor license application goes to the Georgia Secretary of State’s office. Current contact for the licensing board: 2 Martin Luther King Jr. Dr. SE, Suite 313, West Tower, Atlanta, GA 30334, (478) 207-2440.

Don’t wait until you have a project lined up to start this process. The exams take preparation, documentation takes time to gather, and insurance underwriting isn’t instant. Start three to four months before you want to be operational.