Change Order Pricing Calculator

Added scope only

Price the economic effect of the change, not the original job again.

Change Order Pricing starts with costs created by incremental added scope. Existing base-job materials, labor and other direct costs stay outside this calculator. An optional original contract amount is context only and is added after the change price has already been calculated.

Incremental direct cost

Use contractor cost for the extra work.

Added materials, true labor cost, subcontractors, equipment or rental, permits and change-specific fees, delivery, disposal and other direct added costs form the incremental direct-cost base. Customer selling price does not belong in these fields.

True labor cost

Added labor uses employer cost, not a billable rate.

Use added hours × true productive-hour employer cost or a fixed aggregate true labor cost. Customer billable or selling rates would mix a pricing layer into direct cost and can double-count margin.

Calculate true productive-hour labor cost →

Contingency

A contingency allowance is not profit.

Percentage contingency uses incremental direct cost only. It does not compound on overhead, original contract value, profit or customer tax. A fixed contingency can be used when you already know the added risk/cost allowance.

Overhead recovery

Recover business overhead without compounding it on contingency.

Percentage overhead also uses incremental direct cost only. If contingency and overhead are both 10% on 1,000 of incremental direct cost, each is 100. Overhead does not become 110 because contingency was added first.

Resolve an overhead amount or direct-cost percentage →

Margin vs markup

Target margin prices from incremental break-even.

ProjectFigures divides incremental break-even by one minus the target margin. Planned profit is the pre-tax change price minus break-even, and equivalent markup is shown separately. There is no universal change-order markup recommendation.

Convert an explicit markup or margin rule →

Original contract context

The base contract never changes incremental profitability.

When you enter a current/original pre-tax contract amount, ProjectFigures adds the calculated pre-tax change price only to show a revised contract value. That context never changes incremental direct cost, contingency, overhead, target margin or planned incremental profit.

Review base-job pricing separately →

Pre-tax boundary

Sales tax, VAT and GST stay outside profitability math.

The calculated change-order price is pre-tax. Apply legally required customer tax outside this calculation under your normal process. ProjectFigures does not provide tax or accounting advice and never performs FX conversion.

Additive vs deductive

Do not use additive math by simply negating it for a credit.

Deductive or credit changes are deliberately outside V1. Sunk costs, cancellation or restocking charges, committed subcontract costs and contract-specific credit rules can make a simple negative copy of additive pricing economically wrong.

Documentation and approval

A calculated price is not an approved or legally binding change order.

Real change management may require written scope, schedule impact, approvals and contract-specific pricing rules. ProjectFigures prices the incremental economics only; it does not determine entitlement, interpret contract clauses or collect signatures.

Worked example

2,500 break-even at a 20% target margin prices at 3,125 pre-tax.

Suppose added direct cost is 2,000, contingency is 200 and overhead recovery is 300. Incremental break-even is 2,500. At a 20% target margin, the recommended pre-tax change-order price is 3,125, planned incremental profit is 625 and equivalent markup is 25%.

Common mistakes

Do not charge the same economic layer twice.

Common mistakes include copying the original project cost into the change, using a selling labor rate as true labor cost, compounding overhead on contingency, calling contingency profit, or adding customer tax inside margin math.