Change Order Markup Calculator
Enter the base direct cost and configure markup tiers to see the compounding effect of multiple markup layers — and compare compounding versus flat application.
Step 1: Enter the base direct cost
Enter the total direct cost (labour + materials + equipment + subcontractors) before any overhead, profit, or other markups.
Step 2: Configure markup tiers
Each tier is applied to the running total after the previous tier — this is compounding markup. Add tiers to match your change order structure.
How construction change order markups work
Construction change orders include multiple layers of markup applied to direct costs. Each layer — labour burden, overhead, profit, bond, and insurance — is typically capped by percentage allowances in the original contract. When markups are applied on a compounding basis (each tier applied to the running total, not the original base), the cumulative effect can be significantly higher than a flat application of the same percentages.
Common markup categories in change orders
Labour burden
Payroll taxes, workers' compensation, benefits applied to base wages. Should be applied to base wage only, not to the all-in rate.
General overhead
GC's indirect project costs. Most contracts specify a maximum overhead allowance for change orders.
Profit
Contractor's return on the change. Contract markup provisions specify the maximum allowable rate.
Bond & insurance
Project-specific costs that increase proportionally with the contract value. Often specified as a separate rate in the contract.
GC markup on subcontractors
Applied to subcontractor pass-through costs. Typically lower than self-performed work markup.
Subcontractor's own markup
The sub's overhead and profit included in their cost to the GC. The GC's markup is applied on top.
Why your contract markup rates matter
There is no universal "standard" markup rate for construction change orders. The rates that govern your project are those negotiated into your specific contract at execution — whether through an AIA document, a CCDC form, or a custom contract. Before accepting any change order markup rate as reasonable, compare it to the allowances specified in your contract documents.
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Need a full change order analysis?
ChangeGuard extracts and verifies markup rates from actual change order submissions — comparing claimed rates to your contract allowances, not illustrative estimates.
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