What's a fair Toronto change-order price markup percentage?

In Toronto's construction market, a fair change-order markup typically runs between 15% and 25% on labour and materials, with most reputable general contractors landing around 20% as their standard rate.

Change orders exist to cover more than just the direct cost of the extra work. When scope changes mid-project, a contractor absorbs real overhead — rescheduling trades, reordering materials, updating drawings, and managing the administrative burden of revising contracts. That markup compensates for those hidden costs, not just the hammer-and-nail portion of the work.

What drives the markup higher or lower comes down to a few key factors. Larger GCs managing complex projects (custom homes, major commercial work) often justify the full 25% because their overhead structure — project managers, site supervisors, insurance premiums — is genuinely higher. Smaller renovation contractors doing a bathroom or kitchen addition might sit closer to 15-20%. Specialty trades (electricians, plumbers, HVAC) sometimes apply their own markup on top of the GC's, which is normal and expected — just make sure you understand whether you're seeing a trade markup, a GC markup, or both stacked together.

Toronto-specific context matters here. Labour costs in the GTA run roughly 10-20% higher than the rest of Ontario, and material costs have remained elevated post-pandemic. A 20% markup that seemed generous in 2019 is genuinely tighter today. If a contractor is quoting you 10% or less on change orders, ask questions — that's either a red flag that they're cutting corners elsewhere, or they've baked the buffer into their original contract price (which is actually a reasonable approach some contractors use).

What to watch for as a homeowner: The most important thing isn't the percentage itself — it's that the markup is disclosed upfront in your original contract. A well-written contract should spell out the change-order process, the markup rate, and require written approval before any extra work begins. Verbal change orders are one of the most common sources of construction disputes in Ontario. Before signing any contract, confirm the change-order clause explicitly states the markup percentage and approval process.

If you're comparing bids and one contractor has a significantly lower change-order markup, look carefully at their base bid — low markups sometimes signal an intentionally low initial quote designed to make money back through frequent change orders, a practice sometimes called "bid and change."

Your next step is to review your existing contract (or any contract before signing) and make sure the change-order markup is explicitly stated. If it isn't, ask the contractor to add it in writing before work starts. You can also browse licensed general contractors in our directory at Toronto Construction Network to find professionals who are transparent about their pricing structure from day one.