Guide
Most owner-operators price change orders the same as the original job, or worse, do them at cost as a favour. Here's why that loses money, and the exact markup, fee, and paperwork to fix it.
A change order is not a discount item. It is not "while I'm here." It is unplanned work that interrupts a plan you already built, and interruptions cost more than they look like they cost. Yet most trades price a change order at the same markup as the base job, sometimes lower, because the customer is standing right there and haggling feels awkward.
Get this wrong often enough and change orders quietly become the least profitable work you do, even though they're the work you have the most pricing power over. The customer has already committed. They're mid-project. They are not shopping three quotes for an extra outlet or a moved drain line. This is exactly the moment to price properly, not to go soft.
Start with your normal markup. If you run a markup and margin calculator on your base jobs and land at 20%, that's your floor for a change order, not your target. On top of it, add 5 to 10 percentage points because a change order carries costs your base pricing never accounted for:
So a 20% base markup becomes 25-30% on a change order. A 25% base becomes 30-35%. That's the working range for most residential and light commercial service work. Bigger commercial jobs with formal change order processes sometimes go lower on percentage because the dollar values are large, but for the plumber, electrician, or HVAC tech doing a $400 add-on, 25-35% is the honest number.
This is the part most people get backwards. Intuition says a small change order deserves a small percentage on top, because it's "not a big deal." The maths says the opposite.
Fixed costs don't shrink with the job size. A second trip costs roughly the same in fuel, drive time, and setup whether you're adding a $150 fixture swap or a $1,500 sub-panel upgrade. On the $1,500 job, that fixed cost is a small percentage of the total. On the $150 job, it can be several times the value of the work itself. That's why small changes need the highest percentage markup, sometimes 40-50%, and large changes can sit closer to your standard 25-35% band.
| Change order value | Recommended markup range | Why |
|---|---|---|
| Under $150 | 40-50% | Fixed trip/setup cost dominates the job value |
| $150-$500 | 30-40% | Fixed cost still significant relative to job size |
| $500-$2,000 | 25-35% | Standard change order range |
| Over $2,000 | 20-30% | Fixed costs are a small share of total value |
Markup covers labour and material risk. It does not cover the paperwork: writing the change order, revising the invoice, updating the customer, possibly re-permitting. That's a fixed administrative cost, so price it as a fixed fee, not a percentage.
$50-$100 suits a simple, same-visit change. $150-$250 suits anything that needs a written revision, a supplier call, or a delay to the schedule. Put it on its own line: "Change order administration fee: $75." Customers accept a labelled fee far more readily than a vague percentage bump they can't see.
Here's the worked example that makes the case. A customer asks for a $300 add-on, say running an extra circuit, after you've already left site and packed the van. It seems small. It isn't, once it forces a second trip.
Add it up: roughly $130 of disruption cost sits on top of the $300 of actual work. Total real cost to deliver: around $430-$480, depending on your hourly rate and drive distance. If you price the change order at $300 flat because "it's a small job," you've absorbed $130-$180 of cost the customer never sees and never pays for. Do that ten times a year and you've quietly given away $1,300-$1,800.
Run the actual numbers for your own truck and rates through a job profitability calculator before you quote the next one. The disruption cost is real money, not a rounding error, and it belongs in the price.
Verbal change orders are how good jobs turn into arguments over the final invoice. Every change order, no matter how small, gets written down before work starts. Four lines is enough:
Text message or a one-page form both work. What matters is that it exists in writing, with a number and a date, before you touch anything new.
State this on every quote and every job: "Any change to the scope of work requires a written change order with agreed price before work proceeds." One sentence, printed on the estimate, ends most disputes before they start.
Without it, you end up doing the extra work on trust, then negotiating the price after it's already installed, which is the worst possible position for you. The customer has no incentive to agree to your number once the work is done and functioning. Get the number agreed first, every time, even for the small stuff, especially for the small stuff.
None of this needs to be complicated. It needs to be consistent: your base markup as the floor, 5-10 points on top for a normal change, more for small ones, a flat admin fee, and a written sign-off before the tools come back out of the van. Build these numbers into your estimate templates once and it stops being a decision you make on the spot, standing in someone's kitchen, under pressure to say yes for less. A documented pricing process is one of the things worth setting up properly using a small business operations kit, so it's the same answer every time, from every technician, on every job.
The Small Business Operations Kit ($19) turns guides like this one into fill-in-once worksheets: rate card, quoting sheet, job costing, payment terms and follow-up templates. Built by the same people who write these guides.