Taplin Systems

Calculator / scope changes

Change Order Pricing Calculator

Break added scope into direct costs, overhead, profit, and tax so the conversation stays clear.

Inputs

Use your project numbers

Results

Your result will land here

Ready when your numbers are

Nothing is stored. Run the calculator to see a transparent result.

Estimate only. Verify your inputs against current supplier quotes, local requirements, signed scope, and your own accounting. Taplin does not provide legal, tax, or financial advice.

Keep learning

A change order should explain the money.

Start with labor, marked-up materials, marked-up subcontractor costs, equipment, and other direct costs. Add overhead, calculate profit to the requested gross margin, then apply any applicable tax to the pretax total.

Read the field guide

Contractor field notes

Price a construction change order from its added scope

A change-order price should make the changed scope and its cost components understandable. This calculator totals labor, marked-up materials and subcontractors, equipment, and other direct costs; adds overhead; prices the result to the selected profit margin; and then adds the entered tax percentage to the pretax total.

The practical change-order formula

Labor = hours × rate. Marked-up material or subcontractor cost = cost × (1 + markup percentage). Add these and other direct costs, then add overhead. Pretax total = cost plus overhead ÷ (1 − target profit margin as a decimal). Tax = pretax total × tax percentage; proposed total = pretax total + tax.

Worked example

For 8 labor hours at $60/hour, labor is $480. Add $1,000 materials with 15% markup ($1,150 adjusted), $500 subcontractor cost with 10% markup ($550 adjusted), $100 equipment, and $50 other direct costs: direct-cost subtotal is $2,330. At 10% overhead, cost plus overhead is $2,563. A 20% target profit margin gives a pretax total of $2,563 ÷ 0.80 = $3,203.75. At 5% tax, tax is $160.19 and the proposed total is $3,363.94 (rounded to cents).

Common estimating pitfalls

  • Markup percentages apply to the entered material and subcontractor costs before those adjusted amounts join the direct-cost subtotal.
  • The profit percentage is a margin on cost plus overhead, not a markup on that cost. A 20% margin uses division by 0.80.
  • Tax treatment depends on the work and applicable rules. Verify the appropriate tax basis and rate for the project; this calculator applies the entered percentage to the pretax total.

Frequently asked questions

What is included in the direct-cost subtotal?

The subtotal includes labor, marked-up materials, marked-up subcontractors, equipment, and other entered direct costs. Overhead is added after that subtotal.

Is the profit percentage a markup?

No. The calculator treats it as a target margin on cost plus overhead. For example, a 20% margin divides cost plus overhead by 0.80 to calculate the pretax total.

How is tax calculated here?

The entered tax percentage is applied to the calculated pretax total. Confirm the correct tax basis and rate for your specific work before using the result.