The remodeling cost glossary.

The real cost of an hour of labor once you add payroll taxes, workers' comp, and insurance on top of the wage itself. A $30 wage can cost a contractor $40 or more an hour. Our labor lines use burdened cost, not the raw wage, which is why an honest bill runs above a straight wage table.

The cost of being in business that no single job pays for on its own: the truck, the phone, insurance, the office, the estimator's time. It gets spread across every job as a percentage. A bid with no overhead built in is a bid from someone who may not be around for the warranty.

Margin is profit measured against the final price. Markup is profit measured against cost. They are not the same number: a 50% markup is only a 33% margin. We report margin, because that is what the contractor actually keeps and what the homeowner is actually paying.

The cost to deliver a job before any profit: labor, materials, and permits. We call it cost-to-deliver. When a bid lands below break-even, someone is cutting a corner or taking a loss they plan to make up later. It is the floor under every fair price.

The physical cost of the work: the materials, labor, and equipment that go into the finished result. If you can touch it, or the crew installed it, it is a hard cost.

Everything the job needs that is not the physical build: permits, design, engineering, inspections, financing. Easy to leave out of a budget, and a common reason a "cheap" bid ends up costing more.

A placeholder dollar amount for a choice you have not made yet, like tile or fixtures. Useful for starting a contract, and dangerous when it is set low to make a bid look competitive. If the allowance is thin, the overage lands on you.

Money set aside for the surprises a remodel almost always finds once the walls are open: old wiring, rot, a floor that is not level. A budget with zero contingency is a budget that has not met an old house.

The range of profit a competent contractor can earn on a job and still stay competitive, shown separately from break-even cost. We publish the band rather than one markup number, so you can see the difference between a fair price and a gouge.

A single average labor rate used across different trades or tasks. We do not use one. Averaging an electrician's hour against a laborer's hour hides where the money actually goes, so our labor is priced per trade, per metro.

An estimate is an educated guess that can move. A quote or bid is a price the contractor is offering to stand behind. Know which one you are holding before you sign, because only one of them is a commitment.

One price for the whole defined scope. The contractor carries the risk of an overrun, and you carry the risk of a change order if you alter the plan. Simple to compare, as long as the scope is truly the same across bids.

You pay the actual cost of labor and materials plus an agreed fee or percentage. The books are open and the risk sits with you, which works when scope is genuinely unknown and trust is high.

Billing by the hours worked and the materials used, with no fixed total. Fair for small or open-ended work, and expensive when it runs without a cap. Ask for a not-to-exceed number.

A written, priced change to the agreed scope after work begins. Legitimate when you add or alter work. A red flag when it shows up early and often to make up for a lowball bid.

The plan for when the contractor gets paid, tied to finished stages instead of a lump sum up front. It protects both sides, because you never pay far ahead of the work that is actually done.

A percentage of each payment held back until the job is finished and the punch list is closed. It is your leverage to get the last five percent done right.

The list of small items to fix or finish before a job is called complete: the touch-up paint, the sticky door, the missing outlet cover. Final payment should wait on it.

The written description of exactly what the contractor will and will not do. Vague scope is where disputes are born. The more specific it is, the fewer surprises on both sides.

The general contractor runs the job and is your single point of accountability. Subcontractors are the specialists the GC hires for electrical, plumbing, and the rest. On a fixed-price bid you are paying the GC to manage the subs so you do not have to.

A permit is permission to do the work to code. An inspection is the city confirming it was done to code. Work that skips either one can fail at resale or void an insurance claim, even years later.

Insured means the contractor carries liability and workers' comp, so a mistake or an injury is not your bill. Bonded means a third party will pay if they fail to finish or fail to pay a sub. Ask for the certificates, not just the words.

The itemized list of every material and quantity a job requires, down to the fasteners. It is what turns a price into something you can check line by line, and it is how our costs are built.

The first stage of a trade's work, before the walls close: the pipes, wires, and ducts inside the framing. Rough-in gets inspected before it is covered, which is why cutting corners here is both easy and dangerous.

The visible final stage: trim, paint, fixtures, hardware, the parts you actually see and touch. Finish quality is usually where the price difference between two bids is hiding.

A wall or beam that carries the weight of the structure above it. Removing one without an engineer and a proper header is how a remodel becomes a collapse. It is also why "just knock out this wall" is rarely just.

The extra material ordered to cover cuts, breakage, and mistakes, usually five to fifteen percent depending on the material and the layout. A bid with no waste factor will run short mid-job.

A linear foot measures length only, used for trim, fence, and countertops. A square foot measures area, used for flooring, roofing, and paint. Comparing a linear-foot price to a square-foot price is comparing two different things.