Which add-backs count when I sell my roofing company?

Roofing company add-backs are where owners quietly gain or lose real money in a sale. Your tax return was built to keep taxable profit low, which is fine while you own the company. A buyer wants the opposite view: what the company earns once your personal choices are taken out. Add-backs are how you get there.

This checklist covers the add-backs roofing owners forget most, how to prove each one, and the ones buyers push back on. Work through it with your bookkeeper or CPA.

The fastest way to start: open the free add-back finder. It walks you through the common roofing add-backs one at a time and totals them. No email, no sign-up.

What an add-back is, and why it matters more than its size

An add-back is a cost in your books that a new owner would not carry. You add it back to profit to show what the business really earns. Net profit plus add-backs gives you seller's discretionary earnings (SDE), the number most owner-run roofers are priced on. The SDE vs EBITDA guide explains that measure in full.

Add-backs matter more than their dollar amount, because buyers pay a multiple of earnings. As BMSS put it in September 2026, a $100,000 add-back doesn't move the price by $100,000. At an 8x multiple it moves it by $800,000.

The checklist: add-backs roofing owners miss

Every dollar example below is made up.

A few more worth checking: phone plans for family members, owner travel that was really a vacation, and charitable donations. Rent works both ways. If you charge yourself below-market rent, a buyer will subtract the difference, because they'll have to pay the real rate.

The two that work against you

Some adjustments lower your earnings. Expect a buyer's accountant to find them, so find them first.

• Non-recurring income. PPP forgiveness, ERC refunds and insurance payouts on the company's own losses get subtracted.
• Deferred costs. A fleet past replacement, warranty work you haven't reserved for, or family working for free. A buyer will have to pay for these, so they come off earnings or off the price.

How to prove each add-back

An add-back that lives only in your head won't survive diligence. BMSS lists the add-backs that commonly get challenged: estimated round numbers with no invoices or payroll records behind them, personal expenses with no documentation, "one-time" items that show up year after year, and add-backs larger than what actually hit the general ledger.

The habit that fixes this is simple. Start a file now with one line per add-back: the amount, the year, a one-sentence reason, and the proof attached. Keep it going every year until you sell. It's far easier than rebuilding it during due diligence. The add-back finder gives you a starting list to copy into that file.

How our estimate treats add-backs

Our free estimate counts owner pay, interest and depreciation in full, because they tie to your tax return. We estimate that buyers accept itemized add-backs at 75% to 100%, and a rough total with no breakdown at only 50% to 100%. We also cap discretionary add-backs at 15% of revenue, because in our estimate anything above that is more often double counting than real. These are our estimates, not published figures. Itemize and you get the benefit.

Add-backs buyers push back on

Recurring costs dressed up as one-offs

If you call the same kind of cost "one-time" every year, it isn't one-time. Roofing examples:

• Storm season marketing. Big canvassing or ad spend after every hail event is how you win storm work.
• Truck repairs. One engine rebuild is a one-off. Major repairs every year are the cost of an aging fleet.
• Warranty callbacks and leak repairs. These are part of roofing. Expect them to stay in as a cost.
• Legal costs. One settled dispute may be added back. A pattern of fights with carriers or GCs is an ongoing cost.
• Equipment you "had to" buy. Buyers deduct normal yearly spending on trucks and equipment, because roofing still needs them even though, as KPMG notes, it is a low capital intensity trade.

Storm surge costs, when the storm money stays in

Out-of-town crews, hotels, per diem and temporary canvassers after a big event look like one-offs. Buyers will usually only add them back if the storm revenue is also taken out or averaged. They won't add back the cost and keep the windfall.

Your own replacement cost

This is the big one. When you add back your full pay to get SDE, you assume the buyer will do your job. An individual buyer may. A private equity group or a larger roofer won't. They'll hire someone to sell the big jobs, write estimates, deal with adjusters and run production, and take that salary back out. That gives adjusted EBITDA.

How much? The BLS national median wage for general and operations managers was $101,280 in May 2023. We estimate $90,000 to $150,000 plus benefits for a roofing general manager, higher in big metros and for commercial firms. If you're the salesperson, estimator and production manager all at once, it can take more than one hire.

The fix isn't a better argument. It's a team that already does part of your job before you sell. Owner dependence is one of the top drivers on the roofing value drivers page. The prepare your roofing company for sale checklist covers how.

Things that are not add-backs

• Cash jobs that never hit the books. You can't add back income you didn't report, and trying tells a buyer your books can't be trusted. Talk to a CPA about your situation.
• A license in your name. If a buyer must hire a qualifier, that's a real future cost.
• Subs paid on 1099 who look like employees. A buyer may treat the extra payroll cost as part of the true cost of running the business.

Common mistakes

• Double counting. If the truck is fully added back as personal, you can't also add back its depreciation and loan interest.
• Adding back a family member who does a real job. Only pay above market comes back.
• Round numbers. "About $50K of personal stuff" gets cut. Itemize.
• Building the list during diligence. Start the file now.
• Assuming every buyer uses SDE. Larger buyers take a manager's salary back out. Know both numbers.

Questions to ask your CPA, attorney or broker

1. Which of my add-backs will a buyer's accountant accept, and which will they challenge?
2. What proof do I still need for each one?
3. Am I double counting anything between vehicles, depreciation and interest?
4. What is a fair market salary for someone to do my job here?
5. Is the rent I charge the company above or below market?
6. Should I stop running personal costs through the business now, and how?
7. Are any of my 1099 subs a classification risk?

Sources

1. BMSS, EBITDA Add-Backs: What Holds Up and What Doesn't When You Sell Your Business
2. U.S. Bureau of Labor Statistics, OEWS May 2023, General and Operations Managers
3. KPMG Corporate Finance, Roofing Contracting: Market and M&A Perspectives (2026)