What to charge for a change order
A change order is not a small job at your normal rate. It interrupts work that was already sequenced, and the interruption is the part that goes unbilled.
The short answer
Price a change order the same way you priced the job, direct cost, overhead, then markup, and add the cost of disruption, which is the time lost stopping and restarting work that was already planned. Get it approved in writing before starting, because unapproved work is not a change order, it is a gift.
The formula
direct cost = materials + (hours x cost per billable hour)
disruption = time lost to stopping, resequencing and restarting
total cost = (direct + disruption) x (1 + overhead%)
price = total cost x (1 + markup%)
Disruption is the line contractors leave out and clients never think of. On a change raised mid-job it is frequently larger than the labor in the change itself.
Worked example
Moving a socket and adding a spur: six hours of labor at a $46.42 cost per billable hour, $145 of materials, an hour lost to resequencing, 11% overhead, 33.3% markup for a 25% margin:
labor = 6 x 46.42 = 278.52
materials = 145.00 → direct = 423.52
disruption = 1 x 46.42 = 46.42
total cost = (423.52 + 46.42) x 1.11 = 521.63
price = 521.63 x 1.333 = 695.33
margin check = (695.33 - 521.63) / 695.33 = 25.0%
About $695. Quoted at the six hours of labor plus materials, it would have been around $565 and would have earned nothing once overhead was paid.
The approval rule that decides whether you get paid
The test is not whether the change was discussed. It is whether it was approved before your crew started.
Work started on a verbal yes is work you are doing on trust, and the moment there is any disagreement about scope or cost, the absence of a signature settles it against you. This is not about distrusting clients. It is that memories of a five minute conversation on a noisy site genuinely differ.
A one page form with scope, price and effect on the completion date, signed before work starts, converts nearly all of this into a non-issue.
Why small changes are the expensive ones
Large changes get treated as jobs. They are priced, scheduled and invoiced. Small ones get absorbed, and they accumulate.
Six single-hour changes across a project is not six hours. Each one interrupts something, so the true cost is closer to twelve, and none of it was quoted. That is where a profitable job quietly becomes a break-even one.
Setting a minimum charge for any change, even a fifteen minute one, is not petty. It prices the interruption honestly and it makes clients think for a moment before asking, which is usually good for both sides.
The change that also delays completion
If a change pushes the finish date, say so in the same document that prices it. A client who agrees to the cost has not necessarily agreed to the delay, and delay is where liquidated damages and lost follow-on work live.
This is also the honest place to say no. Some changes are cheap in materials and ruinous to a schedule, and a contractor who explains that clearly is worth more than one who says yes to everything and finishes late.
What this leaves out
- Uses a fully loaded cost per billable hour, not a wage. Pricing changes off the wage is the same error as pricing the job off it.
- Excludes contract-specific mechanisms. Standard forms often prescribe how variations are valued and that takes precedence.
- Disruption here is a simple time estimate. On large or heavily sequenced projects it can be far more complex to substantiate.
This arithmetic is free to run in your browser — no signup, nothing held back.
Open the free calculatorCommon questions
- Can I charge a higher markup on change orders?
- Many contractors do, and it is defensible: the work is unplanned, it disrupts sequencing, and you have no competitive tension protecting the client. What you cannot do is apply it silently. Put the rate in the original contract so it is a term rather than a surprise.
- What if the client refuses to sign?
- Then it is not approved and it does not get built. This sounds hard and it is the entire value of having a process. The alternative is doing the work and finding out at final account whether you will be paid for it.
- Do I need a change order for something that takes ten minutes?
- Log it even if you decide not to charge. The log is what lets you show a client at the end that you absorbed nine small changes, which is a much stronger position than mentioning it once in month three.
Spreadsheets that do this
The formulas above, already built and checked — so you fill in your numbers rather than the arithmetic.
Related guides
Last reviewed 22 August 2026