How to price an extra and get it signed before the work
Work out what the change costs you, add your markup, and get the client’s signature before anyone picks up a tool.
An extra is work that isn’t in the contract: a door moved, an outlet added, a wall that turns out to be rotten behind the drywall.
Contractors lose money on extras the same way every time. The work gets done on a handshake, and the price gets argued about weeks later, once the client has forgotten asking.
The fix is the same every time too. Price it, write it down and get it signed before the work starts. Here’s how to do each part well.
Know when it’s an extra
Start with your contract. Read the scope and the exclusions before you price anything. If the work is in the scope, it isn’t an extra, however much it hurts.
Most extras come from one of four places:
- The client changes their mind: a different tile, a moved wall, a bigger window.
- Something hidden turns up: rot, old wiring, a footing that isn’t where the drawings say.
- The design changes: the architect or the engineer issues a revision.
- Someone else holds you up: another trade is late or gets it wrong, and you wait or redo.
Hidden conditions are where a lot of arguments start. Take photos before you open anything up, and again the moment you find the problem. A dated photo of the rot is hard to argue with.
Work out what it costs you
Price an extra the way you’d price a small job: from your own cost up. Five lines cover almost every extra.
- Labour. The hours, times what an hour costs you: the wage plus its burden, like vacation pay, payroll taxes and workers’ comp. The job costing guide shows how.
- Materials. From a supplier’s quote or your last invoice, plus waste and delivery.
- Equipment and rentals. The lift, the saw, the bin, by the day.
- Subcontractors. Get their price in writing first. It goes on the change order like any other cost.
- Cleanup and supervision. An extra takes the foreman’s time and leaves a mess. Put an hour or two in for it.
Then think about time. If the extra pushes the finish date, say so. A week more on site is a week more of supervision, rentals and site costs, and those are real costs too.
Add your markup
Your cost isn’t your price. Markup pays for the office, the trucks, the insurance and the risk, and it leaves a profit.
Some contracts set the markup allowed on changes, so check yours first. If yours says nothing, use the markup you put on your own work.
Markup and margin aren’t the same number. Markup is a percentage of your cost. Margin is a percentage of the price.
A 15% markup is a margin of about 13%, and a 15% margin takes a markup of about 17.6%.
| Labour, 16 hours at $60 (wage plus burden) | $960.00 |
|---|---|
| Materials: door, frame, casing, drywall, paint | $560.00 |
| Delivery and disposal | $130.00 |
| Your cost | $1,650.00 |
| Markup, 15% | $247.50 |
| Price to the client, before tax | $1,897.50 |
The client sees $1,897.50. Your $247.50 is a margin of 13% on that price.
Write it down so nobody can misread it
A good change order fits on one page and answers five questions:
- What is changing, in plain words, and where on the job.
- Why: who asked for it, or what was found.
- The price, and whether tax is extra. The client needs the total. Your cost and markup stay yours, unless your contract says you must show them.
- The time: how many days it adds, if any.
- What isn’t included, so the next surprise is a new change order and not an argument.
Number your change orders and keep them in order on every job. When CO-4 is signed and CO-5 is waiting, everyone can see where things stand.
Get it signed before the work starts
This is the step that gets skipped, because the client is standing right there and the crew is ready to go. Skip it, and you’re doing the work on credit with no agreed price.
Make signing easy. Send the change order the same day, to the person who can approve it, in a form they can sign on their phone.
If the work can’t wait, get a yes to the price in writing, a text or an email, and send the change order the same day.
Then hold the line: no signature, no work. Once the crew knows that’s the rule, extras stop starting on a handshake.
Check your contract
Your contract may say who approves a change, how it’s priced and when to give notice. Some won’t pay for a change not approved in writing. Read it before you need it.
Bill it with the next invoice
Once it’s signed, the change order is part of the contract. Put it on the next invoice or progress bill, so it’s paid on the same schedule as the rest of the work.
The progress billing guide shows where signed changes go on each bill.
Keep the extras still waiting for a signature in view. Hours spent on unsigned work are cost with no price against them, and they eat your margin quietly.
How CrewLog does it
A change order in CrewLog starts from your costs: labour by the hour, parts by the piece and fixed amounts, with your markup on top.
The client only ever sees the price. Your cost and markup stay on your copy.
Talk or type what changed and why, and CrewLog writes it up as a clear scope, with the schedule impact if there is one.
The client opens the link you email and signs on their phone with no login, drawing or typing their name. They get a copy, you get an email, and the price joins the job’s contract.
If the crew is already on it, they can clock in on the extra, so its hours stay apart from the base work. Pricing it starts from those hours and receipts at cost, plus your markup.
Change orders and the time clock are on Crew at $89 a month and Pro at $179. Compare the plans.
More on change orders and job costing on the features page.