Three documents you can copy below: a time-and-materials estimate with a not-to-exceed figure, a fixed-price quotation, and an exclusions and allowances sheet. The third one is the one that will save you money, and almost nobody sends it.
Before any of them, one distinction that costs independent trades more than any pricing mistake: an estimate and a quote are not the same document, and which word you put at the top changes what you owe.
An estimate and a quote are not the same document
On site the words are interchangeable. On paper they are not.
- A quote – also written as a bid or a fixed price – is an offer. When the client accepts it, you have a contract at that number. If you missed something, you eat it.
- An estimate is your best assessment of what the job will cost. It is not a promise of a final figure – but that protection only exists if the document says so plainly, and if the final number is defensible against what you wrote.
The word “estimate” is not a free pass. Several states set expectations about how far a final bill may drift from an estimate before the client’s written approval is required, and a licensing board that receives a complaint will read the document you handed over, not what you meant. Check what your state’s contractors board requires on this specific point before you send anything – the rules are set at state level and they are not the same everywhere.
If you do not know which body that is, NASCLA lists the contractor licensing agency for each state. It is worth ten minutes once – the rules on written proposals, estimate drift and what must appear on the document all come from there.
Practical rule: use a quote when the scope is fully known and you have measured it. Use an estimate when you are opening up walls, working around unknowns, or billing hourly – and put a not-to-exceed figure on it so the client still has a ceiling.
Estimate: time and materials with a not-to-exceed
Select it, copy it, paste it into a blank document. Replace everything in square brackets. The not-to-exceed line is the part people delete to look competitive, and it is the part that keeps the job out of a dispute.
[YOUR BUSINESS NAME]
[Street address, City, State ZIP]
[Phone] | [Email]
[Contractor licence # ______]
ESTIMATE #2026-0141 Date: 14 Sept 2026
Valid until: 14 Oct 2026
PREPARED FOR
[Client name]
[Project address]
SCOPE OF WORK
Replace the existing 100A panel with a 200A panel, relocate
the meter base to the north wall, and re-terminate all
existing branch circuits. Includes utility coordination and
one inspection.
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THIS IS AN ESTIMATE, NOT A FIXED-PRICE QUOTE
Work is billed at the rates below against actual hours and
materials used. The figure at the bottom is my best estimate
of the total, not a cap, except where a not-to-exceed amount
is stated.
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RATES
Electrician $ 95.00 / hr
Apprentice $ 48.00 / hr
After-hours and weekend 1.5 x above
Materials cost + 15%
ESTIMATED
Electrician 22.0 hrs $ 2,090.00
Apprentice 16.0 hrs $ 768.00
Panel, meter base, breakers $ 1,340.00
Conduit, wire, misc $ 410.00
Permit (at cost, receipt provided) $ 185.00
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ESTIMATED TOTAL $ 4,793.00
NOT TO EXCEED without written approval $ 5,300.00
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EXCLUSIONS - see attached exclusions sheet. Anything not
listed in Scope of Work above is excluded.
ACCEPTANCE
Signing authorises work to begin on a time-and-materials
basis under the rates above.
Client ______________________ Date __________
The gap between the estimated total and the not-to-exceed is your unknown allowance. Ten percent is common. On a panel change in a house built before 1970, twenty is more honest.
Quote: fixed price, with the exclusions that make it safe
A fixed price is only safe when the boundary of the work is written down. That is what the included list and the exclusions sheet are for. Without them, “fixed price” means “fixed price for whatever the client later decides was implied”.
[YOUR BUSINESS NAME] QUOTATION [Address / Phone / Licence #] #2026-0142 Date: 14 Sept 2026 This quote expires: 14 Oct 2026 FOR [Client name] [Project address] ----------------------------------------------------------------- FIXED PRICE FOR THE WORK DESCRIBED BELOW This is a quotation, not an estimate. The price is firm for the scope described, and does not change unless the scope changes by signed change order. ----------------------------------------------------------------- INCLUDED 1. Demolition of existing bathroom to studs and subfloor 2. Rough plumbing for relocated vanity and shower 3. Rough electrical: 2 circuits, GFCI, exhaust fan 4. Cement board and waterproofing to shower walls 5. Tile installation, walls and floor (allowance below) 6. Fixture installation (allowance below) 7. Paint, two coats, ceiling and walls 8. All debris removal and daily site clean ALLOWANCES INCLUDED IN THE PRICE Tile $ 1,800.00 (supply only) Fixtures and tapware $ 2,400.00 (supply only) Vanity $ 1,200.00 (supply only) If your selections cost more than the allowance, the difference is added to the final invoice at cost. NOT INCLUDED - see attached exclusions sheet ----------------------------------------------------------------- FIXED PRICE $ 24,600.00 Sales tax $ ______ TOTAL $ ______ ----------------------------------------------------------------- PAYMENT SCHEDULE On acceptance 10% $ 2,460.00 On completion of rough-in 35% $ 8,610.00 On completion of tiling 35% $ 8,610.00 On final inspection sign-off 20% $ 4,920.00 Retainage, if any, per contract. ACCEPTANCE This quotation becomes a contract when signed by both parties. Client ______________________ Date __________ Contractor __________________ Date __________
Note what the payment schedule is tied to: completed stages, not dates. A schedule tied to calendar dates pays you late every time the client delays a selection, and pays you early on nothing when you are ahead.
The exclusions and allowances sheet
This is the document that earns its keep. Pricing disputes are almost never arithmetic. They are one sentence: “I assumed that was included.”
You cannot list everything you are not doing. What you can do is list the ones that actually come up, and get initials on the page before anyone starts.
EXCLUSIONS AND ALLOWANCES
Attached to and forming part of Estimate/Quote #__________
Project: [address] Date: 14 Sept 2026
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READ THIS FIRST
Anything not listed in the scope of work is not included.
This sheet lists the exclusions that come up most often, so
that neither of us discovers them halfway through.
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NOT INCLUDED IN THIS PRICE
STRUCTURAL AND CONCEALED
[ ] Repair of anything found behind walls or under floors
once opened up - rot, termite damage, failed framing,
previous unpermitted work
[ ] Asbestos, lead paint or mould testing, removal or
remediation of any kind
[ ] Structural engineering, drawings or calculations
[ ] Bringing existing non-compliant work up to current code
where it is outside the scope above
SITE AND ACCESS
[ ] Parking permits or fees
[ ] Scaffolding beyond [__] feet
[ ] Protection or repair of landscaping, driveways, paths
[ ] Work outside [__:__] to [__:__], Monday to Friday
UTILITIES AND AUTHORITIES
[ ] Utility connection or upgrade fees charged to the owner
[ ] Fees for permits other than those listed in the scope
[ ] Re-inspection fees caused by work not performed by me
[ ] Any HOA application, review or fee
FINISHES AND SUPPLY
[ ] Anything supplied by the owner, and any delay caused by
late owner-supplied material
[ ] Paint colour changes after work has commenced
[ ] Appliances and their connection unless listed above
GENERAL
[ ] Work requested verbally and not confirmed by signed
change order
[ ] Overtime required to meet a date not stated in this
document
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ALLOWANCES
ITEM ALLOWANCE SELECTED DIFFERENCE
---------------------------------------------------------------
Tile $ 1,800.00 $ _______ $ _______
Fixtures and tapware $ 2,400.00 $ _______ $ _______
Vanity $ 1,200.00 $ _______ $ _______
An allowance is a placeholder, not a budget I have agreed
to hold to. When you make your selections, the difference
in either direction is adjusted on the final invoice.
Selections are required by: ____/____/________
Delay in selections may delay the completion date.
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Client initials ________ Contractor initials ________
The line about verbal requests is the same protection a change order form gives you after work starts. Putting it in the exclusions sheet means it is agreed before there is anything to argue about. The full change order form is in the invoice template for contractors.
What every estimate must carry
- The word ESTIMATE or QUOTATION at the top. Not “proposal”, not “pricing”. The document should announce which of the two it is.
- Your licence number. Several states require it on written proposals as well as on invoices, and it costs nothing to include everywhere.
- Your legal business name – the one on the contract and the bank account, not a trading nickname.
- A sequential number. You will need to reference it on the invoice and any change order.
- An expiry date. See below.
- A scope a stranger could check. If a third party could not tell from the page whether a task was in or out, it is not written tightly enough.
- Who pulls and pays for permits. The single most common blank left on a quote.
- A reference to the exclusions sheet, and the sheet actually attached.
One line above is a prerequisite rather than paperwork: the legal business name. If the name you are about to type into the estimate does not exist as a registered entity yet, the document is going out under a trading nickname, and every later document — the contract, the invoice, the bank account the client pays into — has to match it. You can register it yourself through your Secretary of State for the state fee alone. If you would rather hand it over, Bizee files it and bundles registered agent service with the filing, for a period that depends on the package – confirm it at checkout. Do it before the first estimate goes out, not after a client queries who they are actually contracting with.
Allowances, and why the final bill beats the estimate
An allowance is a placeholder for something the client has not chosen yet – tile, tapware, lighting, a vanity. You cannot price what has not been selected, so you carry a number and adjust later.
Allowances are the number one reason a final bill exceeds the quote, and they are also the easiest of all overruns to defend – if you did two things.
- Say in writing that the allowance is a placeholder, not a cap. Clients read an allowance as a promise unless the page says otherwise.
- Put a selection deadline on it. Late selections stall the job, and without a date on the page the delay becomes your fault.
Set allowances at what a reasonable middle-of-range selection actually costs today, not at the cheapest thing on the shelf. Lowballing an allowance makes your quote look competitive and guarantees an argument at invoice time.
Put an expiry date on it
A quote with no expiry is, in the client’s mind, valid forever. People do call back nine months later expecting the number to hold, and material prices do not wait for anyone.
Thirty days is the usual figure. Shorten it when a large part of the price is material that moves – copper, lumber, anything imported. One line does it:
This quotation is valid for 30 days from the date above. After that date material prices will be re-checked and the figure may change.
FREE DOWNLOAD
All 3 documents above, in one Word file
Word .docx · 36 KB | PDF · 4 KB · Monospaced so the columns stay lined up. Everything in [brackets] is yours to replace. Real tick boxes and a notes area. Made to print and keep in the truck.
What the estimate itself costs you
Driving out, measuring, working out the scope and writing it up is two to three hours. Do six of those in a week and you have given away most of a working day, unpaid.
That cost is real whether or not you notice it, and it is why the honest answer to “should I charge for estimates” is: it depends on how many you convert. If one in three turns into work, free estimates are just marketing and the maths is fine. If it is one in ten, you are running a free consulting service.
Charging a call-out or assessment fee filters out the people collecting five prices for a job they will not proceed with. It also filters out some genuine customers. Both of those are true at once, and which matters more depends on how full your book is. A common middle path is to charge for the visit and credit it against the job if they proceed.
Frequently asked questions
Is an estimate legally binding?
Generally not in the way a quote is – but that depends on how the document is written and on your state’s rules, and a badly written estimate can be read as a quote. Ask your state contractors board what is expected in writing before you rely on the distinction.
How far over an estimate can the final bill go?
There is no single national number, and anyone who gives you one is guessing. Several states expect written approval past a certain drift. The practical answer is the not-to-exceed line: agree a ceiling in writing and the question never arises.
Should I show my hourly rate?
On a time-and-materials estimate you have to. On a fixed-price quote you do not, and showing it invites a negotiation about your rate instead of about the job.
What if the client wants a “ballpark” over the phone?
Give a range, say plainly that it is a range and not a quote, and follow it with something in writing the same day. Phone numbers get remembered as promises.
Do I need a licence number on an estimate?
In several states, yes, on written proposals as well as invoices. Since it costs nothing and looks professional, put it on everything. What licence you need in the first place is covered in how to get a contractor license.
Related guides
- Invoice template for contractors – three more you can copy, including the change order form
- How to get a contractor license – the experience requirement, the two exams, the bond
- Registered agent service – who receives legal documents when you are on site
- Going independent as a tradesperson – the order to do things in, and when not to
If you are quoting more than a few jobs a month
At two or three quotes a month, the documents above and a folder are enough. Do not buy software to solve a problem you do not have yet.
The point where that stops working is not about volume of work – it is about follow-up. Once you cannot remember which quotes are outstanding, which you have chased once, and which went quiet three weeks ago, you are losing jobs you already paid to price. That is the moment a system earns its cost, and not before.
What to look for when you get there: it should turn an accepted quote into an invoice without retyping it, keep the exclusions attached to the record, and tell you what is outstanding without you opening anything. Anything beyond that is for companies with crews.