Finance & Contracts
Cost-Plus Contract
A contract where the owner pays the contractor's actual costs plus a markup (percentage or fixed fee).
In a cost-plus arrangement, the contract specifies the markup (commonly 10–20% of cost) but not the final price. The contractor passes through actual material, labor, and sub costs with the markup added. Common in custom-home builds and remodels where the scope can't be fully defined upfront. Often capped with a "GMP" (Guaranteed Maximum Price) so the owner has cost certainty. Requires detailed time and material tracking — sloppy receipts kill cost-plus profitability.
Related terms
T&M (Time and Materials)
A contract type where the contractor bills for actual labor hours and materials …
Fixed-Price Contract
A contract where the contractor agrees to complete the scope for a defined total…
GMP (Guaranteed Maximum Price)
A hybrid contract: cost-plus during construction, but capped at a maximum total …
In Vexor
Vexor is field-service software for trade contractors. If your workflow includes cost-plus contract, Vexor likely has a built-in workflow for it — quoting, scheduling, JSA, daily logs, photos, invoicing, all in one workspace. See all features →