What is the difference between markup and contingency here?

Q: How do I calculate the total cost of a plumbing or HVAC job with markup?

The estimator follows standard contractor practice: it sums material, labor (hours x rate), permits, and disposal into a subtotal, applies markup as a percentage, then adds contingency on top, and finally applies tax. The expression is total = ((material + labor + permits + disposal) x (1 + markup%)) x (1 + contingency%) x (1 + tax%).

Q: Are the indicative material prices accurate enough to quote from?

No. Prices pulled via the Refresh prices button come from the reference catalog and are indicative only. Verify current cost at the distributor before quoting, and confirm permit and inspection fees locally since they vary by municipality.

Question

What is the difference between markup and contingency here?

Accepted Answer

Markup is your applied margin over direct costs and defaults to 20 percent, while contingency defaults to 10 percent and covers unexpected site conditions, code upgrades, and rework. They compound in sequence: markup is applied to the subtotal first, then contingency is applied to the marked-up amount before tax.

What is the difference between markup and contingency here?

Answers