Construction · Extra work and change orders
Change order markup calculator.
Enter the cost of the extra work in each category and the markup you apply to it. The page adds them up and shows markup against margin.
Extra work costing $13,400.00 across four categories, with 35% on labor, 15% on materials and equipment and 10% on subcontractors, prices at $16,000.00: a 19.4% overall markup on cost, which is a 16.3% margin on the price.
Cost and markup by category
Your result
One markup does not fit a whole change order
Change order work is rarely one kind of cost. Labor, materials, equipment and subcontracted work carry different risk and different overhead, and the public owner whose method is described below gives each its own percentage. Putting a single blended figure on the total hides which category is paying for your overhead. This calculator keeps the four categories separate and then reports the blended result, so you can see how the mix of costs moves the overall markup.
It also keeps markup and margin apart, because the two get swapped constantly in change order talk. A markup is a percentage of cost; a margin is a percentage of the price. Thirty-five percent on cost is not thirty-five percent of the price, as the worked example shows.
Worked example
Extra work costs $4,200 of labor, $3,000 of materials, $1,200 of equipment and $5,000 of subcontractor work: $13,400.00 in all. With 35% on labor ($1,470), 15% on materials ($450), 15% on equipment ($180) and 10% on subcontractors ($500) the markup is $2,600.00 and the change order price is $16,000.00. Overall that is $2,600.00 ÷ $13,400.00 = 19.4% on cost, and $2,600.00 ÷ $16,000.00 = 16.3% of the price. The percentages in this example are the Caltrans force account rates described below, used as an illustration; your contract sets yours.
How it is calculated
- For each category, markup = cost × markup percentage, and category price = cost + markup.
- Change order price = total cost + total markup.
- Overall markup on cost = total markup ÷ total cost. Overall margin on the price = total markup ÷ change order price, which is always lower than the markup.
The default percentages come from one public owner’s published method. Caltrans’ Local Assistance training Module 8 (January 2026) describes force account payment under CTSS 9-1.04: labor is [(basic hourly wages plus fringe benefits) × labor surcharge percentage + subsistence and travel allowance] × 135%, which is a 35% markup; equipment is rental rate × 115%; materials are (purchase price + delivery) × 115%; and subcontractor force account costs get a 10% markup (× 110%). The same module says the labor surcharge percentage was “currently about 12%”. I did not open the Standard Specifications text itself, so check the edition in your contract. Calculation as of October 26, 2026.
What this does not cover
- What markup you are entitled to. That is set by your contract, the general conditions and, on public work, the owner’s specifications. The Caltrans figures are an example of one owner’s method, not a standard.
- Time impact, delay or acceleration costs, and bonding or insurance adjustments on the change.
- Markup on markup. Each category is marked up once; if a subcontractor marks up their own work, enter their price as your cost.
Sources
- Caltrans Local Assistance, Module 8: Payment (January 2026), force account markups under CTSS 9-1.04 (opened 2026-10-26)
Sources
Common mix-ups
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Often assumedA 35% labor markup means I keep 35% of the change order price as profit.
What the source saysIn the Caltrans force account method labor is multiplied by 135%, a markup on cost. A 35% markup is 0.35 / 1.35 = 25.9% of the price, so the share of the price you keep is lower than the markup. [1]
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Often assumedOne markup percentage applies to every cost on a change order.
What the source saysCaltrans' force account method uses separate rates: labor wages and surcharge plus 35%, equipment 15%, materials 15% and subcontractor costs 10%. Each cost category carries its own percentage. [1]
Checked against these sources on .
Frequently asked questions
How do I calculate a change order markup?
Add up the cost of the extra work in each category, apply the markup your contract allows to each, and add the markups to the cost. This page does that and reports the overall markup and margin.
What is the difference between markup and margin on a change order?
Markup is a percentage of cost; margin is a percentage of the price. A 35% markup on cost is a 25.9% margin on the price, because 0.35 divided by 1.35 is 0.259.
What markups does Caltrans use for force account work?
Caltrans Local Assistance Module 8 (January 2026) lists labor at 35% on wages plus surcharge, equipment 15%, materials 15% and subcontractors 10% under CTSS 9-1.04. Check the edition in your own contract.
Can I use these percentages on a private job?
Only if your contract says so. They are one public owner’s method and are shown as an example, not as a standard.
Why is my overall markup lower than my labor markup?
Materials, equipment and subcontractor costs carry lower rates, so the blended figure sits between them, weighted by how much of the cost each category is.
Estimate only
This page is a pricing aid, not contract or legal advice. Results use the numbers you enter and the formulas and sources named above, as read on October 26, 2026. Everything runs in your browser; nothing is sent anywhere.