Carry 5% on scoped work you have done many times, 7-10% on a typical remodel, and 10-15% when you are opening walls in an older house (Projul). On pure alteration work, RSMeans says 20% "is not too much" (RSMeans). Keep a small field contingency inside your prices, and put the big hidden conditions on the estimate as named allowances. On a fixed-price job, every unknown you didn't price comes out of your pocket. In the 2026 Houzz study, 37% of renovating homeowners went over budget, and 22% of those blamed construction problems found once the work started (Houzz). On a $24,000 bathroom, a cracked cast iron drain and a rotted subfloor can take $2,300 of your profit.
What contingency percentage fits which job?
Start from the year the house was built and how much of it you will open. The median owner-occupied home in the US was 42 years old in 2024, and about 47% were built before 1980 (NAHB). So roughly half the houses you walk into are old enough to hide something.
| The job | Contingency |
|---|---|
| Work you repeat, on surfaces you can see (a deck on new footings, LVP over a sound slab) | 3-5% |
| Kitchen or bath with walls opened, house built 1978 or later | 7-10% |
| Kitchen or bath with walls opened, house built before 1978 | 10-15%, plus named allowances |
| Addition, structural work, or drawings still changing | 15-20% |
The bands come from Projul and RSMeans. The split at 1978 is ours, and it is not arbitrary. More on that below.
What is contingency for, and what isn't it for?
Contingency pays for what you could not see when you priced the job. That's it. Rot under the tub, a joist somebody notched for a drain in 1971, a junction box buried behind plaster, cloth-wrapped wire still live. Projul puts it plainly: contingency is not profit, and it should never be used to hide estimating errors or crew mistakes.
Three things get dumped into contingency that don't belong there.
Your own estimating errors. If you always run 12 hours over on tile, the fix is 12 more hours in the tile line. A cushion hides the error and you carry it into the next job. The case for fixing it at the source is in how to price a job from a walkthrough.
The homeowner's changes. New tile, a moved window, a niche in the shower. That is new work and it gets a change order, signed before you build it. If you pay for it out of contingency, you have done the extra work for free.
Things you can know from the year built. This is the one that catches people. A house built before 1978 falls under the EPA's lead renovation rule. Disturb more than 6 square feet of paint in a room and you need a certified firm and lead-safe work practices (EPA). Containment, plastic, HEPA cleanup and the cleaning check are not a surprise. You knew them from the date on the listing. Price them as lines in the base estimate.
How do you size the contingency from the risks you can name?
Take the job apart before you pick a percentage. List every hidden condition this house could have, what each costs to fix, and how likely it is. Then add it up.
Here is a hall bath gut in a 1964 ranch, priced at $24,000 fixed. The costs and odds are illustrative. Put in your own.
| What could be behind it | Cost to fix | Your odds | Expected cost |
|---|---|---|---|
| Rotted subfloor at the tub drain and toilet flange | $900 | 1 in 2 | $450 |
| Cracked cast iron drain to the stack | $1,400 | 1 in 3 | $467 |
| Galvanized supply lines in the wall | $800 | 1 in 2 | $400 |
| Two-wire circuit, no ground, new circuit needed | $650 | 1 in 2 | $325 |
| Total | $3,750 | $1,642 |
The expected cost is $1,642, or 6.8% of the job. The worst case is $3,750, or 15.6%.
Now the decision. Bury 7% in the price and hope, and you win on the average house and lose $2,100 on the bad one. The subfloor and the drain are the two big swings between them, $2,300 if both hit. So take them out of the contingency and put them on the page:
Subfloor replacement if rot is found: $45 per square foot, allowance 20 sq ft. Cast iron drain replacement, if cracked, to the stack: $1,400. We stop, photograph it, and nothing proceeds until you sign.
That leaves the galvanized and the wiring, about $725 expected, plus the small stuff nobody writes down: an out-of-square wall, a tile layout that needs one more box. Call it 4-5% inside your prices. Your number goes out lower than the contractor who buried 15%. And you are covered when the floor comes up soft.
Should the contingency show on the estimate?
Not as a percentage. As named allowances, yes.
Buildwise's advice to fixed-price builders is to keep the contingency inside the lump sum where the client never sees it (Buildwise). For the small stuff, that is right. A line reading "Contingency: 10% — $2,400" tells the homeowner you don't know what the job costs, and it is the first line they ask you to cut.
The big hidden conditions are different. Burying them makes you expensive on every bid to cover the one house in three that has a cracked drain. A named allowance with a unit price does the opposite: your base price is sharp, and the homeowner can see exactly what happens if the wall is bad. It reads like someone who has pulled a tub before. What to exclude from a contractor estimate covers the wording for the ones you won't touch at all.
What's the difference between contractor and owner contingency?
Yours covers unknowns inside the scope you agreed to. The owner's covers their decisions. They are different money and they should sit in different pockets.
In that Houzz study, 32% of those who went over budget cited unexpected project complexity (Houzz). Some of that is your hidden conditions. Much of it is the homeowner deciding mid-job that the vanity should be 72 inches instead of 60. That is not yours to absorb.
Say it at the kitchen table, before you sign: "My price covers what's behind these walls, up to what's written here. Keep another 10% of your own for anything you change your mind on." Buildwise gives cost-plus clients the same advice, to have at least 10% available.
What happens to unused money depends on the contract. On fixed price, what you didn't spend stays with you as profit. On cost-plus it normally goes back to the owner (Projul). That is the fair trade for carrying the risk. It is also why the contingency has to be real. Padding on scope you could have measured is just a higher price, and the next bidder will be under you.
What this misses
The odds in the worked example are guesses. One in two for rot under a 60-year-old tub is plausible in a humid state and pessimistic in Arizona. Nobody publishes hidden-condition rates by house age that we could find. Your own last ten bathrooms are the only honest source.
The percentage bands are soft. Projul's and RSMeans' ranges are rules of thumb from people who have priced a lot of work, not survey results. They agree roughly with each other, which is a comfort, not proof.
State rules vary. The EPA rule is federal, but some states run their own lead programs with different paperwork. Check yours before you price the first pre-1978 kitchen.
Allowances need a contract that honours them. A named allowance only protects you if your contract says work stops until the homeowner signs. Without that clause, it's just a number on a page.
Contingency only works if the unknowns get written down while you're still standing in the room. BidWalk builds the estimate as you walk the job, so the soft spot by the toilet flange becomes an allowance line instead of a memory.
