How to write a construction estimate
- Break the job into phases or trades — site work, foundation, framing, roofing, mechanical, finishes. Each becomes a line or group of lines.
- Price labor and materials for the work you do yourself. Labor is easiest as hours × rate; materials come from your take-off.
- Add subcontractor quotes as their own lines.
- Use allowances for items the client hasn't chosen yet, such as cabinets or flooring, and say they'll be adjusted to the actual cost.
- Add overhead and profit, and a contingency for unknowns.
- List exclusions and assumptions — what plans the estimate is based on and what isn't included.
- Set a validity date and a payment schedule.
Example construction estimate
| Line item | Qty | Rate | Amount |
|---|---|---|---|
| Site prep and excavation | 1 | $6,800.00 | $6,800.00 |
| Foundation – footings, slab and waterproofing | 1 | $21,400.00 | $21,400.00 |
| Framing – labor (crew of 4, 3 weeks) | 480 | $48.00 | $23,040.00 |
| Framing lumber, sheathing and hardware | 1 | $18,650.00 | $18,650.00 |
| Roofing (subcontractor) | 1 | $14,200.00 | $14,200.00 |
| Electrical rough-in and finish (subcontractor) | 1 | $11,600.00 | $11,600.00 |
| Plumbing rough-in and finish (subcontractor) | 1 | $9,800.00 | $9,800.00 |
| Allowance – kitchen cabinets and countertops | 1 | $12,000.00 | $12,000.00 |
| Overhead and profit (12%) | 1 | $14,099.00 | $14,099.00 |
| Contingency (5%) | 1 | $6,579.00 | $6,579.00 |
| Total | $138,168.00 |
The framing labor line uses hours as the quantity. Overhead and profit (12% of the costs above it) and the contingency (5% of the total before it) are shown as separate lines so the client can see them; some builders spread them across the other lines instead.
Allowances and exclusions
Allowances keep the estimate moving when the client hasn't picked finishes: "Allowance – kitchen cabinets and countertops $12,000". If they choose something that costs more, the difference is billed as a change. Exclusions protect you from scope creep — permits, landscaping, appliances, unforeseen rock or soil conditions.
Excel for big estimates
Download the Excel file to keep working on a large estimate: the amounts and totals are live formulas, there are spare rows to add items, and it opens in Google Sheets too.
From estimate to progress billing
When the project starts, click Convert to invoice for a deposit invoice, then bill progress payments using our construction invoice template, which handles percentage complete and retainage.
Frequently asked questions
What's a typical contingency?
Often 5–10% for new construction with complete plans, and 10–20% for renovations where hidden conditions are likely.
Should I show overhead and profit to the client?
It's your choice. Showing it builds trust with some clients; others prefer one price per line. Either way, include it — it's what keeps your business running.
Is an estimate binding?
An estimate is an informed price, not a fixed contract. For building projects, use a written contract that refers to the estimate, the plans and how changes will be handled.
Can I estimate in square feet?
Yes. Put the area in the quantity and a price per square foot in the rate. It's useful for early budgets; a detailed estimate by phase is more reliable.