Construction · Change Orders
The Complete Guide to Construction Change Orders
Change orders are where contractors protect their profit or give it away. What goes in one, how to price it, and how to get it signed before work starts.
- A change order is a written change to scope, price, or schedule.
- Stop before you say yes to any mid-job request.
- Write the change down with exact scope, materials, and dimensions.
- Price it fast: direct costs, normal markup, and an admin fee.
- Put the schedule impact and new contract total in writing.
- Get a signature before work starts, then file it and repeat.
What is a construction change order?
You are three weeks into a bathroom remodel. Then the client says, “While we are at it, can we redo the hallway closet too?” Say “sure” and keep working, and you just donated labor and materials. Say “let me write that up,” and you protect your margin. A change order is a written change to the contract scope, price, or timeline. It is the strongest protection a contractor has mid-job.
Change orders come from client requests, hidden conditions like rot, inspector requirements, or material price jumps.
Why construction change orders matter
Unpaid extra work is a slow leak. Bureau of Labor Statistics survival data shows only about half of construction establishments opened in the year ending March 2019 were still operating six years later (51.2% in March 2025). A signed change order lets you bill the work, moves the schedule with the scope, and stands up in a dispute. See our guide on how to bid a construction job.
The 6 steps to handle a construction change order
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Stop before you say yes
The moment the scope changes, pause. Do not say “no problem” and keep swinging. Say “good idea, let me write that up so you can see the cost.” That sentence protects the whole job’s margin.
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Write the change down in detail
Number it (CO-001, CO-002), date it, and give the reason. Then describe the exact work. “Additional work in hallway” invites a dispute. “Remove closet shelving, install a 72 by 48 inch built-in, prime and paint to match trim” settles one.
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Price it with your normal markup
Add up direct costs: materials, labor, and subs. Apply the same markup as the original contract, never a discount. Then add a small admin fee, a flat $50 to $250 or 5 to 10%, for the time to stop, re-plan, and re-order.
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Put the schedule impact in writing
A $2,000 change can also add 3 days. If the change order does not say so, the client holds you to the old finish date. State the days added and the new running contract total.
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Get the signature before the work starts
Never frame it as protection from the client. Say, “Make sure this matches what you had in mind. Once you sign off, we will get it scheduled.” A client who refuses to sign is a red flag for the final bill.
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File it and issue the next one just as fast
One change order per change, the day it comes up. A pile of them at the end of the job triggers sticker shock. Real-time paper is accurate paper, and it trains the client that changes have a process.
Use change orders to kill scope creep
Scope creep is death by small favors. On a $30,000 job at a 20% margin, twenty free $150 favors quietly eat half the $6,000 profit. The fix is a consistent line, not a hard no:
| Change size | What to do |
|---|---|
| Under $100 | Do it, note it in your daily log, and mention it was free |
| $100 to $500 | Get a written yes by text or email before you start |
| Over $500 | Full change order with a cost breakdown, schedule impact, and signature |
Change order discipline is one piece of the puzzle. Our guide to protecting your profit margin covers the rest.
How to price a construction change order
Speed decides whether the client pushes back. A number presented on the spot gets a yes. A number three days later gets a negotiation. Snap a photo of the changed scope and the SimplyWise Cost Estimator turns it into an itemized estimate in about 6 seconds, so the change order is priced before you leave the room.
A sample change order price
A client adds six recessed lights to a kitchen remodel that had no electrical work:
| Line item | Detail | Cost |
|---|---|---|
| Materials | 6 LED kits, wire, boxes, switch | $420 |
| Electrician | 6 hours at $85 per hour | $510 |
| Patch and paint | 2 hours at $55 per hour | $110 |
| Direct costs | Subtotal | $1,040 |
| Markup at 25% | Same as the contract | $260 |
| Admin fee | Paperwork and coordination | $100 |
| Change order total | $1,400 |
The client sees exactly what they are paying for.
Price change orders faster with SimplyWise
This system lives or dies on speed. The SimplyWise Cost Estimator turns a photo of the job into an itemized estimate in about 6 seconds, so the written change order takes minutes, not an evening at the kitchen table. Receipt scanning files every material cost against the right job, so your markup rests on real numbers. It is free to try.
Sources
- U.S. Bureau of Labor Statistics, Business Employment Dynamics, Table 7, Survival of Private Sector Establishments, Construction (51.2% of establishments opened in the year ended March 2019 still operating March 2025).
A change order is a ten minute conversation now or a three week money argument later. Take the ten minutes.
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Frequently asked questions about construction change orders
Money and markup
How much markup should I charge on change orders?
Use the same markup as your original contract. For residential work, 20 to 30% on direct costs is common. Commercial contracts often set the markup, usually 10 to 20%. Never discount it as a goodwill gesture.
Can a change order reduce the contract price?
Yes. That is a deductive change order. When scope comes out of the project, credit the cost back in writing. It keeps the contract accurate and prevents a fight over the final bill.
Signatures and disputes
Is a verbal change order legally binding?
Sometimes, but it is nearly impossible to prove. In a dispute, a verbal change order is close to worthless. At minimum, send a text or email that confirms the change and save the client’s written yes.
What if the client says just do it and we will figure out the cost later?
That is a trap, even when the client means well. Politely decline. Say you want them comfortable with the cost before work starts. Written approval on every change protects both of you.
What do I do when a client keeps making changes?
Frequent changes are fine as long as each one is documented and paid for. If delays are stacking up, talk about the total impact on cost and schedule. Transparency now prevents resentment later.
What if I find a hidden problem and the client will not pay to fix it?
Document the condition with photos and a written description, and explain why the repair matters. If the client still refuses, get the refusal in writing and note that you recommended the fix. On safety issues, involve the building inspector.
Never eat another change order.
When the scope changes, snap a photo. The SimplyWise Cost Estimator turns it into an itemized estimate in about 6 seconds, so the change order is priced on the spot. Free to try, no credit card.