What Roofers Need to Know: Roofing material tariffs introduced in 2025 pushed steel and aluminum costs up by 50%, driving sharp price increases across metal roofing systems and beyond. For roofing contractors, roofing material tariffs aren’t just a purchasing problem—they’re a tax, accounting, and margin problem. This post breaks down exactly how to handle tariff-driven cost increases on your books, what stockpiling materials actually means for your taxes, and how to protect your profit before it disappears.

Trade policy moves fast. One executive order can add 25% to your next shingle order before you’ve finished your morning coffee. As of mid-2026, the tariff situation for roofing contractors looks like this: 50% tariffs on steel and aluminum, a 10% softwood lumber tariff, and 25% tariffs on various lumber derivatives—all stacking on top of country-specific levies (according to the Associated General Contractors of America, updated June 2026). A June 2026 update further adjusted rates on some equipment categories, but the core 50% steel and aluminum rates affecting roofing materials remain in place. That’s not pocket change. That’s a direct hit to your bottom line.

But here’s what nobody’s writing about: the accounting side of all this. Everyone’s talking about how tariffs raise prices. Nobody’s talking about what that means for your books, your taxes, or your margins. That’s where we come in.

This post is built for roofing business owners who need more than a headline—they need a plan.

How Roofing Material Tariffs Are Driving Up Your Material Costs

Let’s put numbers to this. According to the National Association of Home Builders (NAHB), tariffs on imported steel and aluminum could increase roofing material costs by as much as 20%. And with the Associated General Contractors of America (AGC) tracking ongoing volatility in the construction materials market, metal roofing systems—built almost entirely from tariff-hit steel and aluminum—are among the most exposed of all, with the 50% tariff landing squarely on their core materials.

Even “non-metal” roofing isn’t off the hook. Asphalt shingles use aluminum granules. Steel nails drive every roof. Flashing, vents, gutters—all metal. The tariff ripple hits everything.

And the landscape keeps shifting. The 25% steel and aluminum tariff was doubled to 50% in mid-2025. New investigations into critical minerals, robotics, and industrial machinery are ongoing—meaning more potential cost increases are waiting in the pipeline.

For a roofing contractor budgeting jobs months in advance, that kind of volatility isn’t just inconvenient. It’s a margin killer.

How to Handle Roofing Material Tariff Costs on Your Books

Rising costs create real accounting decisions—and getting them wrong has consequences.

Job costing has to be updated constantly. If you’re still estimating material costs based on quotes from six months ago, you’re underbidding jobs and wondering where the money went. Update your material unit costs every time a supplier invoice comes in at a new price. That’s not optional—it’s how you protect your gross profit on every single job.

Separate your material costs as a line item. This applies to your internal books AND your customer bids. When materials are buried inside a single “job cost” number, price swings are invisible until the end-of-job reconciliation—by which point, the damage is done. Visibility is protection.

Accrual vs. cash basis matters more now. If your business uses accrual accounting, materials sit on your balance sheet as inventory until they’re used on a job. The cost flows to your income statement (as Cost of Goods Sold) only when the materials are consumed. Under cash basis, the timing is different—but the principle holds: know when your material costs hit your P&L, and plan around it.

Do Roofing Material Tariffs Make Stockpiling Worth the Tax Risk?

This question comes up constantly right now. The short answer: yes. The slightly longer answer: it depends on how you account for it.

Stockpiled materials are inventory, not an immediate deduction. When you buy $40,000 worth of shingles to get ahead of a tariff increase, that $40,000 doesn’t automatically reduce your taxable income. Those materials sit on your balance sheet as an asset. The deduction happens when the materials are used on a job—not when you pay for them. Cash leaves your account now; the tax benefit comes later.

FIFO vs. LIFO: This choice has real tax consequences. Most small roofing businesses use FIFO (First In, First Out)—the assumption that the oldest inventory gets used first. In a rising-cost environment, FIFO means your oldest (cheaper) inventory hits your books first, leaving the newer (more expensive) stock sitting in the warehouse. The result: lower reported costs, higher taxable income.

LIFO (Last In, First Out) flips that. Under LIFO, your most recently purchased—and most expensive—materials are deemed used first. That raises your Cost of Goods Sold and lowers your taxable income. In an inflationary or tariff-driven cost environment, LIFO can generate meaningful tax savings. It’s worth a conversation with your CPA.

The carrying costs are deductible, though. Storage space, additional insurance for stored inventory, any spoilage or waste—those are legitimate business expenses. Track them carefully.

One more thing: large-scale stockpiling requires cash—sometimes a lot of it. Bulk buying only makes sense if you have the storage capacity and relatively predictable project demand. Tying up $60,000 in materials sitting in a warehouse while you’re waiting on permits is a cash flow risk. Be strategic about it.

How Roofing Material Tariffs Hit Your Profit Margins

Here’s the math most roofing business owners haven’t done yet. With NAHB and AGC both tracking rising material costs across steel, aluminum, and lumber, the squeeze on margins is real—and it adds up faster than you’d think. On a typical roofing job, materials make up a big chunk of your total cost, so even a modest price bump takes a serious bite out of your profit.

On most roofing jobs, materials make up roughly 40–60% of your total job cost—which means when tariffs drive those material prices up, they hit your profit hard and fast. With the NAHB and AGC both reporting steady increases across steel, aluminum, and lumber, even a modest price bump can quietly erode already-thin margins. Run the numbers on your own jobs and the picture gets uncomfortable fast.

If materials are 50% of your job cost and they’ve gone up 15%, your total job cost just climbed 7.5%—before you’ve changed anything else. On a job with a 25% gross margin, that 7.5% cost increase wipes out nearly a third of your profit. On a job with a 20% margin, you’re close to breaking even.

And that’s before you factor in project delays caused by supply chain disruptions, or the administrative cost of managing pricing uncertainty with clients.

The contractors absorbing these costs quietly—without adjusting their prices or contracts—are the ones who will feel it most on their year-end tax return. Not because of a tax issue, specifically. Because their profitability has eroded, and they won’t know how bad it is until the books are closed.

Repricing Strategies: Protecting Your Profit From Roofing Material Tariffs

There are a few smart moves here. None of them require you to blow up your client relationships.

Add escalation clauses to your contracts. This is the most underused tool in a roofing contractor’s arsenal. An escalation clause allows for contract price adjustments if material costs rise or fall by a set threshold—typically 2–3%, substantiated by supplier invoices or published price indexes. It shifts some of the volatility risk to the project owner, which is fair. The owner benefits from a lower initial bid; you get protection if the market moves against you.

Separate material pricing from labor pricing in your bids. When materials are a visible, itemized line in a customer proposal, price changes are easier to explain and justify. “Our labor estimate is locked in. Material costs are based on today’s pricing and subject to change if tariffs shift before your job starts” is a reasonable and honest position.

Move toward shorter bid validity windows. A quote that’s good for 30 days is far safer than one that’s good for 90, given how fast tariff policy can change. Shorten your exposure window.

Consider time-and-material contracts for longer or larger jobs. Fixed-price contracts carry all the risk when material costs are volatile. T&M contracts pass through actual material costs to the client. Not every customer will accept this, but it’s worth offering on commercial jobs or anything with a long lead time.

What Every Roofing Contractor Should Do About Roofing Material Tariffs Right Now

This isn’t theoretical—here are the concrete next steps:

• Update your material unit costs in your estimating system based on current supplier pricing. Do this weekly if costs are moving.
• Review your accounting method (FIFO vs. LIFO) with your CPA. If you’ve been stockpiling or plan to, the method you use will affect your tax bill.
• Add an escalation clause to every new contract you sign. Work with an attorney to draft one that’s fair and defensible.
• Track your gross margin by job, not just at year-end. If tariff costs are compressing margins, you want to know job-by-job—not twelve months after the fact.
• Build a cash reserve to absorb supply chain surprises. Three to six months of operating expenses gives you the flexibility to buy ahead of price spikes without straining payroll.

Your Books Can Either Protect You or Expose You

Roofing material tariffs aren’t going away anytime soon. The policy landscape is still evolving, more investigations are in progress, and material prices remain unpredictable. The contractors who come out ahead won’t necessarily be the ones who pay the lowest prices for materials. They’ll be the ones who know exactly what those materials cost, when those costs hit their books, and how to price their jobs to stay profitable through the volatility.

The accounting side of tariffs isn’t glamorous. But it’s where the real money is won or lost.

If you want to know exactly how tariff-driven cost increases are affecting your margins—and what you can do about it on your taxes—that’s exactly what we do at Roofer Tax Savings. Book a strategy call today and let’s make sure rising costs aren’t quietly eating your business alive.

Frequently Asked Questions

What are the current roofing material tariff rates in 2025–2026?

As of June 2026, steel and aluminum tariffs sit at 50% for items made entirely or mostly of those metals, with 25% tariffs on derivatives. Softwood lumber faces a 10% tariff, with various lumber products taxed at 25%. A 10% global baseline tariff is also in effect through July 2026. These rates are subject to ongoing change. Always verify current rates through the AGC’s Tariff Resource Center before making purchasing decisions.

Can roofing contractors deduct the cost of stockpiled materials immediately?

Generally, no. Stockpiled materials are recorded as inventory on your balance sheet and only become a deductible expense (Cost of Goods Sold) when the materials are actually used on a job. The one exception: if your business qualifies as a small taxpayer and uses a simplified accounting method, the rules may differ. Consult your CPA for guidance specific to your business.

Should a roofing contractor switch to LIFO accounting during a tariff period?

LIFO can reduce taxable income when material costs are rising because it treats your most expensive (most recently purchased) inventory as used first, increasing your Cost of Goods Sold. Whether it makes sense for your business depends on your inventory volume, how consistently costs are rising, and your current accounting setup. Switching accounting methods requires IRS approval, so this is a decision to make with your CPA before acting.

What is an escalation clause and should roofing contractors use one?

An escalation clause is a contract provision that allows the contract price to be adjusted if material costs change beyond a set threshold—typically 2–3%. For roofing contractors navigating unpredictable tariff costs, escalation clauses offer meaningful protection on larger or longer-duration projects. The best practice is to use published price indexes or supplier invoices as the trigger mechanism for price adjustments.

How do roofing material tariffs affect gross profit margins?

The impact depends on your current margin and how much of your job cost is materials. If materials represent 50% of your job cost and those costs have risen 15%, your total job cost increases by 7.5%. For a contractor with a 25% gross margin, that can eliminate roughly a third of the profit on a single job—without any changes to labor or overhead. Tracking margins at the job level, not just annually, is essential for catching this early.