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Home Improvement Cost Glossary

Plain-English definitions for estimates, allowances, bids, contingencies, labor, materials and project measurements.

Reviewed September 14, 2026 • HomeCostEngine Editorial

Planning and pricing terms

Allowance

A budget amount reserved for an item that has not been selected or fully defined. If the final selection costs more, the project total can increase.

Bid

A contractor's offer to perform defined work for stated compensation and terms. Homeowners should compare the scope and exclusions, not only the bottom line.

Change order

A written modification to contract scope, price or schedule after the original agreement.

Contingency

Money reserved for uncertainty such as concealed damage, quantity changes or required repairs. It is separate from known scope.

Cost per square foot

Total cost divided by relevant area. The denominator must be clear: living area, floor area, wall area and roof surface are not interchangeable.

Estimate

A forecast based on available information and assumptions. An online planning estimate is not a binding contractor quote.

Labor burden

Employer costs beyond base wages, potentially including payroll taxes, insurance and benefits. Contractor labor pricing can also include supervision and overhead.

Material takeoff

A detailed list of material quantities required from drawings or measurements.

Overhead and profit

Amounts included by a contractor to support business operating costs, risk and earnings. They are different from direct labor and material costs.

Permit

Authorization from a local jurisdiction for regulated work. Requirements and fees vary.

Roofing square

A roofing unit equal to 100 square feet of roof surface before product-specific packaging and waste.

Scope of work

A written description of included tasks, materials, quantities, responsibilities and exclusions.

Unit cost

Cost per measurable unit such as square foot, cubic yard, fixture or roofing square.

Waste factor

An added percentage for cuts, breakage, pattern matching and unusable material. It should match layout complexity and product requirements.

Using these terms

Start with project calculators, review the estimate methodology, then use our quote comparison tool when local proposals arrive.