How to Price a Kitchen Remodel. Contractor's 2026 Playbook
A pricing framework for renovation contractors that captures every real cost, protects your margin, and reads professionally to homeowners. Line item breakdowns, markup rates by trade, contingency math, and the pricing mistakes that lose 30 percent of margin.
Bilal Shahzad
Founder, Renovate
Every renovation contractor eventually learns the pricing lesson the hard way. You quote a job at what feels like a fair number, execute the work, and at project end you realize you made 8 percent net when you needed 20. That gap between what you quoted and what you should have quoted is the single biggest killer of contracting shops. This playbook is the pricing framework that keeps every kitchen remodel margin healthy.
The pricing framework in one sentence
Direct cost, plus trade markup, plus overhead, plus contingency, equals customer facing price. Every quote follows this framework. Every deviation from this framework is a place margin leaks.
The formula
Direct cost (materials + labor + subs)
+ Trade markup per line item
+ Overhead 10 to 15 percent
+ Contingency 10 to 25 percent (sized to project risk)
= Customer facing price
Line items and rates
Do not price from scratch on every quote. Build a template with the typical kitchen remodel scope items and update rates quarterly. Line items are the difference between a professional quote and an amateur quote.
Standard kitchen quote line items
- Demo and haul away
- Structural work (if applicable)
- Plumbing rough in (with permit fee separate)
- Electrical rough in (with permit fee separate)
- HVAC modifications (if applicable)
- Insulation and drywall
- Flooring underlayment and finish
- Cabinet supply and install
- Countertop template, fabrication, install
- Backsplash tile supply and install
- Appliances (with delivery and install)
- Plumbing fixtures (faucet, sink, disposal, dishwasher supply lines)
- Electrical fixtures (lighting, outlets, switches)
- Paint (walls, trim, ceiling)
- Trim carpentry
- Permits and inspections
- Overhead (as a percentage line item)
- Contingency (as a percentage line item)
Markup by trade
Different line items carry different markups. Materials sold at every hardware store carry lower markup than specialty items. Direct labor carries higher markup than subcontracted labor.
Cabinets and casework
20 to 30 percent markupSemi custom cabinets are the largest single line. Carry a healthy markup because you handle warranty and installation coordination.
Countertops (quartz, granite)
20 to 30 percent markupFabricator gives you a wholesale price. Markup covers template coordination, install coordination, and templating error risk.
Appliances
5 to 15 percent markupLow markup because homeowners can price shop. Still worth carrying so you handle delivery, install coordination, and warranty for them.
Labor (direct crew or self)
40 to 60 percent markupFully burdened labor rate (including benefits, taxes) times 1.4 to 1.6. This is where you make your money.
Subcontractor work (plumbing, electrical)
10 to 20 percent markupThe sub already marks up their materials and labor. Your markup covers coordination, quality checks, and payment handling.
Materials (tile, flooring, hardware, paint)
15 to 30 percent markupDepends on volume. Higher volume you can carry lower markup. Specialty items always carry higher.
Contingency math
Contingency is not padding. It is a reserve for unknown site conditions revealed during demo. Explaining this in the quote is the difference between a customer who trusts contingency and a customer who tries to negotiate it away.
Low risk (10 to 15 percent contingency)
- House built 1990 or later
- No structural changes
- Existing plumbing and electrical stays in place
- No moisture history
High risk (20 to 25 percent contingency)
- House built pre-1980 (electrical, cast iron drains, asbestos)
- Any structural change (load bearing wall, header install)
- Moving plumbing fixtures
- Prior water damage or moisture history
6 pricing mistakes that lose 30 percent margin
The mistakes almost every contractor makes at least once. Learn from these instead of paying the tuition yourself.
Quoting a flat total on a project scope you have never built before. Under 3 kitchens on the same layout, always use line item cost plus.
Zero markup on materials. Ties up your capital and eats the waste. Minimum 15 percent even on volume items.
Under quoting labor at market rate instead of your rate. A 5 person crew's rate is higher than a solo contractor's rate because of overhead and management burden.
Skipping contingency to hit a competing bid. If the customer chose you for price alone, they will not choose you for the change orders you will need to file.
Verbal only change orders. Every change is a signed change order document with pricing. No exceptions.
Presenting quotes as PDFs of Word documents. Modern tools with online accept + milestone billing schedule read 15 to 30 percent more professionally and close faster.
Presenting the quote
The tool matters more than most contractors think. A branded quote with line items, a milestone billing schedule, and a one click accept button closes 15 to 30 percent faster than the same numbers in a Word document PDF.
Build a line item template with quantities and rates
Do not price from scratch on every quote. Build a template with typical kitchen scope items (demo, cabinets, countertops, appliances, labor, subs) with per unit rates. Update rates quarterly.
Calculate direct costs at supplier pricing
Cabinets at your supplier discount. Countertops at your fabricator price. Labor at fully burdened crew cost (with benefits and taxes). Never quote at retail. You have no room to negotiate down.
Apply per line item markup
Materials 15 to 30 percent. Labor 30 to 60 percent. Subs 10 to 20 percent (they are already marked up by the sub). Add trade specific expertise for high risk work (structural, gas, HVAC).
Add overhead as a percentage
10 to 15 percent overhead line item covers rent, insurance, tools, vehicles, back office. This is separate from job direct costs.
Add contingency, sized to project risk
10 to 15 percent for new construction or houses with recent renovations. 20 to 25 percent for older houses or any structural work. Explain what contingency is in the quote so the customer does not think it is padding.
Round the total for professionalism
$47,283.46 reads as either amateur or dishonest. Round to $47,500. Homeowners trust round numbers.
Present with a milestone billing schedule
Every quote includes the milestone schedule that will bill it (deposit, demo, rough in, cabinets, punch). Clients that see the schedule accept 20 to 30 percent faster than clients staring at a single total.
Frequently asked questions
How should I price a kitchen remodel?+
Use a cost plus markup framework. Calculate direct costs (materials, labor, subs) accurately. Add a trade specific markup (25 to 45 percent depending on scope). Add 10 to 15 percent overhead. Add 5 to 10 percent contingency for scope creep. The total is your customer facing price. Never quote flat fees on projects you have not built before. You will lose 20 to 30 percent of margin on hidden costs.
What markup should I add on materials?+
Industry standard is 15 to 30 percent on materials. Lower end (15 percent) for high volume items where the homeowner can price shop (appliances, big box cabinets). Higher end (30 percent) for specialty items with limited comparables (custom trim, semi custom cabinet upgrades). Never zero markup. You tie up capital, handle warranty, and eat waste on cuts and breakage.
What markup on labor?+
Direct labor cost is what you pay the crew (or take home yourself). Markup for a solo contractor is 40 to 60 percent to cover overhead and profit. For a shop with employees the markup is often 30 to 50 percent on top of the fully burdened labor rate (which already includes benefits and taxes). Anything under 30 percent leaves no room for the business.
What is a fair contingency?+
10 to 15 percent for straightforward projects with no structural work. 20 to 25 percent for older houses (pre-1980) or any project with structural changes. Explain to the customer in the quote what contingency is (a reserve for unknown conditions revealed during demo) and that unused contingency is refunded at project end.
How do I quote change orders?+
Every change order is a mini estimate. Line items, materials with markup, labor with markup, and a schedule impact statement. Signed by both parties before work proceeds. Verbal only change orders are the single biggest reason contractors end up in disputes with clients.
Should I include a full breakdown or just a total?+
Full breakdown wins for 90 percent of clients. Line items with quantities and rates read as professional. Just a total quotes read as either lazy or suspicious. Line items also make change orders trivial to price mid project.
How much profit should I make on a kitchen remodel?+
Target net profit of 15 to 25 percent after all direct costs, overhead, and contingency. For a $50,000 mid range kitchen that is $7,500 to $12,500 in the shop. If your quotes consistently net under 10 percent something is wrong with either pricing or execution. Above 25 percent you may be leaving deals on the table by overquoting.
Should I mention Renovate in my quotes?+
The tool matters less than the presentation. Renovate produces branded quote PDFs with your logo and colors. Clients see 'Prime Kitchens Co.' not 'Renovate'. That said, having a modern quote tool with online accept and milestone billing does read as more professional than a Word document PDF and quietly increases close rates 15 to 30 percent.
Price kitchens faster with Renovate
Renovate ships templated kitchen line items with per unit rates, automatic markup calculation, milestone billing schedules, and one click accept. Everything from this playbook baked in
Written by
Bilal Shahzad
Founder, Renovate
Bilal is the founder of Renovate, a contractor CRM that ships everything renovation, plumbing, HVAC, roofing, and 20 plus trades need to run a great business on the road. He writes about pricing, hiring, and how contractors win in North America.
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