Cost-Plus Contract

A contract where the customer pays actual costs plus a fee — either a fixed dollar amount or a percentage of costs.

Cost-plus splits the difference between T&M and fixed-price. The contractor's fee (or percentage) is locked, but the cost base floats with actual spending.

Often used on custom homes and high-end remodels where finishes drive cost and the customer wants real-time price visibility.

Related

• Time and Materials (T&M) — A billing structure where the customer pays the actual cost of labor and materials plus a markup or fixed margin.
• Fixed-Price (Lump-Sum) Contract — A contract where the contractor agrees to a single total price for the defined scope, taking the risk on cost overruns.
• Compare contractor CRMs — FieldKrew against Jobber, Housecall Pro and ServiceTitan
• Retainage — A percentage of each progress payment (typically 5-10%) that the owner or GC withholds until the job is fully complete and accepted.
• Draw Schedule — A pre-agreed payment schedule for a construction project, tied to milestones or percentage of completion.
• Deposit — An up-front payment collected when a contract is signed, typically 10-30% of the contract value.