Free Change Order Profit Calculator

Most contractors lose money on change orders not because they under-charge on purpose — but because they forget to account for all five layers of cost. A change order that looks like a $2,000 win on paper can easily turn into a break-even or a loss once you factor in the real cost of deploying labor and materials. The difference between a contractor who grows and one who struggles is usually just a consistent habit of running the numbers before sending the price.

The five cost layers you must capture: First is direct labor — hours times your hourly rate. Second is labor burden, which is the 22–30% on top of wages that covers payroll taxes, workers' compensation insurance, and benefits. This number alone causes more margin erosion than any other single factor. Third is materials and equipment — the raw cost of what goes into the ground or gets consumed on the job. Fourth is subcontractor cost, which should always be marked up to cover your coordination time and risk. Fifth is overhead — the portion of your fixed business expenses (insurance, trucks, office, software) that every job must carry its share of.

Markup versus margin are not the same thing — and confusing them is one of the most common and costly mistakes in the trades. A 35% markup on cost gives you a 26% margin on revenue, not 35%. If you're quoting a target margin of 30%, you need a markup of approximately 43%. This calculator computes both for you so you always know exactly what your client price means for your bottom line.

The best contractors make it a non-negotiable habit: before any change order leaves the office, every cost layer is entered into a calculator, the markup is verified against the target margin, and the result passes a sanity check. It takes two minutes. Over the course of a year, that habit is worth tens of thousands of dollars in recovered profit — money that was already being earned, just not captured correctly.