How to price a renovation job

Updated 14 July 20266 min read

Pricing is where renovation jobs are won and lost. Quote too high and you lose the bid; too low and you work for free. Accurate pricing comes down to two things: a complete list of every cost, and a method that reliably turns those costs into a profitable price. Here's how to do both.

The cost components

Materials — everything you buy, with waste factored in.
Labour — your crew's hours at a loaded rate (not just wages).
Subcontractors — electrical, plumbing, HVAC, etc.
Equipment & disposal — rentals, skips/dumpsters, haul-away.
Permits & fees — where required.
Overhead — your business costs spread across jobs.
Profit margin — what the business earns.
Contingency — a buffer for the surprises renovations always find.

Turn costs into a price

Most contractors use one of two approaches, often together:

Unit pricing — a rate per unit of work (per m²/ft², per fixture) from your own history. Fast and consistent for familiar work.
Detailed takeoff — quantify every item from the plans and price each. More accurate for bigger or unusual jobs.

Then add overhead and margin. Watch the trap here: markup and margin are not the same. A 50% markup on cost is only a 33% margin. Decide which you're targeting and apply it consistently.

Price from the plans

A detailed takeoff is far faster when you can measure straight off a drawing. If you have a floor plan, you can estimate a renovation from the plan — pull areas and counts without re-measuring on site — then feed those quantities into your pricing.

Common mistakes that kill profit

Pricing a vague scope — nail the scope first.
Forgetting overhead or contingency.
Confusing markup with margin.
Lowballing to win, then losing money on the build.
Not documenting changes as change orders.

Price and manage the job in one place

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Frequently asked questions

What costs go into pricing a renovation?

Materials, labour, subcontractors, equipment and disposal, permits, your overhead, a profit margin, and a contingency for surprises. Miss any of these and the job eats into your margin.

What's the difference between markup and margin?

Markup is the percentage added to your costs; margin is profit as a percentage of the final price. They aren't the same number — a 50% markup is only a 33% margin — so know which you're using or you'll under-earn.

How big should a renovation contingency be?

It depends on how much is unknown. For a straightforward job 10% is common; for older properties or projects opening up walls, 15-20% is safer. Contingency covers the surprises renovations always find.

Why do contractors underprice jobs?

Usually a vague scope, forgetting overhead or contingency, confusing markup with margin, or lowballing to win the bid. An accurate takeoff from a clear scope is the fix.