Usually, a calculation of 5 to 10% of the total construction budget is allocated to a construction contingency. Home builders and remodelers typically allocate between 5% and 10% of a project budget for a construction contingency. This amount creates enough space for unexpected expenses. Anyone who keeps track of estimates and costs manually calculates a contingency percentage on all costs, before profit margins are applied.
Whether made on paper or calculated by hand, these methods offer familiar and accessible estimation options that put budgets and proposals in the hands of customers. However, any price negotiation or recalculation requires careful monitoring and risks human error. A construction contingency is the amount of money allocated to pay additional or unexpected costs during the construction project. Usually, a calculation of 5 to 10% of the construction budget should be allocated to your construction contingency.
