Add a contingency percentage and fixed allowances to your base estimate to get a total renovation budget you can plan around.
A contingency is money you set aside for what nobody can price yet: rot behind the tile, knob-and-tube wiring, a joist that has to be sistered, a building inspector's requirement or a change you decide on halfway. Enter your base estimate, a contingency percentage, any fixed allowances and owner costs outside the contract.
Formula: contingency = base × percentage + fixed allowances; total budget = base + contingency + owner costs.
Worked example (illustrative, the default): a $60,000 kitchen with a 15% contingency and $2,000 of allowances: contingency = $60,000 × 15% + $2,000 = $11,000. With $2,500 of owner costs, the total budget before tax is $60,000 + $11,000 + $2,500 = $73,500.
Choosing a percentage: there is no official figure. As a planning rule of thumb, many owners use around 10% for a cosmetic job in a newer house and 15–20% or more for older houses, structural work, basements with moisture history or projects where plans are not final. Read how much contingency to keep.
Limits: a contingency is not permission to spend; changes should still go through written change orders. Add sales tax to the total with the sales tax calculator.
Pitfalls, disputes and official sources
The common causes of renovation cost overruns in Canada, how written change orders should work, Ontario's 10% estimate rule, cost-plus risks and a worked overrun example.
Estimates, quotes and contracts
How to choose a renovation contingency percentage for Canadian homes, what it should and should not cover, allowances versus contingency, worked examples and rules for spending it.
Estimates, quotes and contracts
An illustrative room-by-room budget for refurbishing a 1,800 sq ft older house in Canada, with systems upgrades, moving-out costs, contingency, GST and how to phase it.
