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Pricing & Profit5 formulas shown

Change Order Calculator

Scope changed, so the price has to. Enter the original contract, the extra work's real cost, and the margin the job was priced at — and get a change order amount that keeps the job's overall margin intact instead of quietly diluting it.

Method and content reviewed October 1, 2026 · formulas checked against a test suite · runs entirely in your browser

Change order amount $357.00. New contract price $4,357.00 at 35.0% margin.

The original contract

What the original scope was estimated to cost you

The additional work

Per hour, fully burdened — not the bare wage

The margin to hold

Between 0 and 100 — use the Margin Calculator to check it
Change order amount to invoice
$357.00
FormulaChange order = (Original cost + Extra cost) ÷ (1 − Margin) − Original price
Your calculation($2,400.00 + $432.00) ÷ 0.65 − $4,000.00 = $356.92
Pricing the whole new cost base to the margin keeps the job's overall percentage intact — the change order isn't just cost plus a guess.
Cost of the additional work
6 hrs × $42.00 + $180.00 materials
$432.00
Margin-correct amount
Before rounding to an invoiceable number
$356.92
Change order to invoice (rounded up)
$357.00
New contract price
$4,357.00
Margin after the change order
Was 40.0% — it should match
35.0%
Profit inside the change order
What you'd give away by billing the extra cost alone
$232.62

The amount shown preserves the margin the job was priced at — it is not just the cost of the extra work. Get the scope in writing and the price signed before the work starts; a change order agreed after the fact is a negotiation, not a document.

Worked example

Remodeling: where the number comes from

A remodeler is mid-way through a $6,000 kitchen backsplash and cabinet-hardware job (estimated to cost $3,600 at a 40% margin) when the customer asks to add two pantry shelving units: 6 extra hours at a $42 burdened rate plus $180 of materials. (Illustrative example — use your own contract numbers.)

InputValue
Original contract price$6,000
Original estimated cost$3,600
Extra labor6 hrs × $42 burdened = $252
Extra materials$180
Margin the job was priced at40%

Result: Invoice $720 — the job keeps its 40% margin

Billing just the $432 of cost would have handed the customer the $288 of margin the extra work should earn. The check row confirms the whole job still carries 40% — the change order was priced the same way as the original contract.

Load this example into the calculator

The calculation

Extra cost$252 + $180 = $432.00
New total cost$3,600 + $432 = $4,032.00
Priced to the same margin$4,032 ÷ 0.60 = $6,720.00
Change order$6,720 − $6,000 = $720.00
New contract price$6,000 + $720 = $6,720.00
Margin after the change($6,720 − $4,032) ÷ $6,720 = 40.0%

How this calculator works

Every result comes from the formulas below — the math shown is the math used. Change any input and results update instantly in your browser; nothing is sent to a server.

  • Cost of the additional work: Extra Cost = (Extra Hours × Burdened Rate) + Extra Materials + Other
  • Change order amount (margin-correct): Change Order = (Original Cost + Extra Cost) ÷ (1 − Margin ÷ 100) − Original Price
    Pricing the whole new cost base to the margin keeps the job's overall percentage intact.
  • New contract price: New Price = Original Price + Change Order
  • Margin after the change order: Margin % = (New Price − Total Cost) ÷ New Price × 100
    Should match the original margin — that's the whole point of the method.
  • Profit given away by billing cost alone: Foregone Profit = Extra Cost × Margin ÷ (100 − Margin)
    What a free change order costs: the extra cost plus the margin it was supposed to carry.

What the result means

The change order amount reprices the whole new cost base to the job's original margin, so the contract keeps earning what it was designed to earn. The margin-after row confirms the job's overall percentage is intact; the last row shows the profit given away if the extra work were done for cost alone.

When to use it

Use it the moment scope changes — before the extra work starts, so the number goes into a signed change order rather than a later negotiation.

Want the concept behind the math in depth? Read Change Orders: Pricing Extra Work Without Giving the Margin Away or Job Costing: Did the Job Actually Make Money?.

Common mistakes

  • Billing just the extra cost and calling it fair — that donates the margin on the change work.
  • Pricing the change with a different (usually thinner) margin than the original contract.
  • Starting the extra work before the change order is signed.

Frequently asked questions

How do I price a change order?

Add the extra work's true cost — burdened labor hours, materials, subs — then price the whole new cost base to the job's original margin: (original cost + extra cost) ÷ (1 − margin), minus the price already quoted. On a $4,000 job priced at 40% margin with $432 of extra cost, the change order is ($2,832 ÷ 0.60) − $4,000 = $720. Billing just the $432 of cost would give the margin on the extra work away.

Should a change order include profit?

Yes. The extra work consumes your overhead, ties up your crew and carries the same risk as the original scope — it earns the margin like any other work. The only arguments against margin on change orders come from customers, and they don't argue it on the original contract.

Can I just bill my hourly rate for extra work?

Only if your contract says time-and-materials with a stated markup. If the job was priced to a margin, hourly billing on changes dilutes the job's overall margin — the calculator's margin-after row shows exactly how far it falls. Some contractors use a higher hourly rate on change work precisely because it's unplanned and disruptive; that's a pricing policy, and it should be in the contract.

What if the change order is a credit to the customer?

Run it the other way: remove the deleted scope's cost from the cost base and reprice the whole job to the same margin — never just subtract the customer's original line price, which would credit them more than the work was worth to you. This calculator handles additions; for deductions, apply the same formula with a negative extra cost.

When should a change order be signed?

Before the extra work starts — that's what makes it a contract term rather than a negotiation. Get the scope description, the price and the schedule impact in writing, and have the customer sign or reply by email confirming. A change order agreed after the work is done trades your leverage for a promise.

Next step

After the job closes, check whether the estimate and the change orders predicted what it actually cost.

Run the job profitability check →