Worked example: an unpaid change more than halves profit
A 24,000 project with 18,000 cost starts with 6,000 gross profit. Another 40 hours at 75 per hour plus 500 of expenses costs 3,500. Absorbing it leaves 2,500 profit and a 10.4% project margin. A 25% margin on the change requires a fee of 4,666.67.
Define the change before assigning a fee
Write down the added deliverable, acceptance criteria, rework to existing tasks, extra reviews and effects on the delivery date. A deterministic hours estimate does not describe uncertainty in those items. For uncertain work, use a three-point bid-price check or model the revised project in the licensed app.
Keep incremental and project economics separate
The change fee reaches the target margin on the added cost only. An underpriced original project can remain underpriced after a properly priced change. Read the unbilled-hours example and the uncertainty-aware change-request guide, then use the proposal checklist to document the agreed scope.
Frequently asked questions
Should I enter a billing rate or a cost rate?
Enter the loaded cost of doing the work. The calculator then adds the target margin to calculate a selling fee. Using a billing rate can count profit twice.
Does a change fee automatically preserve the project margin?
No. The fee preserves the chosen margin on the incremental cost. The original price and original cost still determine the economics of the original scope.