What is a change order and when should contractors use one?
A change order is the written agreement that updates a job's scope and price after the customer has approved the quote. Here's what one should include, when to use it, and how the GST/HST works.
A change order is a written agreement that updates a job after the customer has approved the quote. It sets out what's changing, what it costs, how it affects the schedule, and the customer's approval, all before the changed work begins.
That definition matters because most disputes over a final invoice start with a change nobody wrote down. The customer remembers asking for "a bit of lighting under the cabinets". You remember quoting them at the door. Without a change order, the invoice is the first place the new number appears in writing, and that's the worst moment for a customer to see it.
Short answer A change order is a written amendment to an approved quote that records added, removed or substituted work, the price difference including tax, any change to the schedule, and the customer's approval. Contractors should use one whenever a change affects the price, materials or finish date, and get it approved before doing the changed work. Keep it attached to the original quote, so the revised total and the earlier versions stay together.
This guide covers change orders on residential and small commercial trade jobs in Canada, such as a kitchen, a bathroom or a panel upgrade. It doesn't cover large construction contracts managed by an architect, or the engineering change orders used in manufacturing. The principle is the same at every scale, and the paperwork for a small job can be much simpler.
Why change orders matter on small jobs
On a large project, change orders are part of the contract from day one. On a small residential job, changes tend to happen in conversation. The customer walks through on day two and asks whether the backsplash could run all the way to the ceiling instead. You say yes, adjust the materials order, and carry on.
Each of those conversations creates a small gap between what was approved and what's being built. A change order closes that gap while everyone still agrees on what was said. It protects the customer from a surprise on the final invoice, and it protects you from absorbing the cost of work you were asked to do.
When should contractors use a change order?
Since the purpose is to close the gap between the approved quote and the actual job, the test is simple. Use a change order whenever the price, the materials or the finish date moves. In practice, that covers five common situations.
- The customer adds work. An extra outlet, a second coat, lighting under the upper cabinets.
- The customer removes work. They decide to keep the old vanity, or skip the privacy screen.
- A material is substituted. The specified product is out of stock, or the customer picks an upgrade.
- Hidden conditions turn up. Rot behind the drywall, wiring that doesn't match the panel, a joist that has to be sistered.
- The schedule changes for a reason outside your control. The customer delays access, or asks you to finish earlier at extra cost.
The fourth situation needs the most care. Hidden conditions aren't anyone's fault, which makes them the easiest to leave undocumented and the hardest to charge for later. We'd suggest photographing the condition, stopping that part of the work, and sending the change order before you open the wall any further.
The Seven-Line Change Order, and what it should state
Knowing when to write a change order leads to the next question, which is what goes in it. We use a seven-line checklist. A change order with all seven lines can be understood by the customer, by your accountant and by you, months after the job is closed.
| Line | What it says |
|---|---|
| 1. Reference | The original quote number and date |
| 2. Change | What's being added, removed or substituted |
| 3. Reason | Customer request, hidden condition or substitution |
| 4. Price | Labour and materials for the change, before tax |
| 5. Tax | GST/HST, plus PST or QST where it applies |
| 6. Schedule | Days added or saved, and the new finish date |
| 7. Approval | Customer's signature or online approval, with the date |
Two lines deserve a closer look. Line 3, the reason, is what stops a hidden-condition change from reading like an upsell. Line 7, approval, is what turns a conversation into an agreement. Without it, the other six lines are only a proposal.
A worked example, a kitchen renovation in Nova Scotia
The checklist is easier to follow with real numbers. Take a kitchen renovation in Halifax. Nova Scotia's HST rate is 14% (CRA rates by province), and you can check every province's rate on our provincial rates table.
The approved quote is $18,000 before tax. With 14% HST, that's $2,520 in tax and $20,520 in total. The customer paid a 25% deposit of $5,130 on approval.
On day three, the customer asks for two changes. One is LED lighting under the upper cabinets, and the other is a large-format porcelain backsplash instead of the subway tile on the quote.
| Item | Amount |
|---|---|
| Under-cabinet lighting | $1,150 |
| Porcelain backsplash upgrade | $1,450 |
| Change before tax | $2,600 |
| HST at 14% | $364 |
| Change total | $2,964 |
The revised job is now $20,600 before tax, $2,884 in HST and $23,484 in total. The original $20,520 plus the $2,964 change gives the same figure, which is a useful check before you send anything. After the $5,130 deposit, the balance owing is $18,354.
Laid out this way, the customer sees exactly where the extra $2,964 comes from, and so does your accountant. The tax on the change is calculated on the change alone, at the same rate as the original job.
What if a change lowers the price?
Changes run in both directions. Say the customer later decides to keep their existing range hood, removing a $500 supply-and-install line. Before tax, the job falls by $500, and the HST falls by $70.
If you haven't invoiced yet, the next invoice simply reflects the lower total. If you've already invoiced and charged the tax, section 232 of the Excise Tax Act allows you to credit the GST/HST on a reduced price, and requires you to issue a credit note to the customer within a reasonable time. Your accountant can confirm how that credit is reported on your return.
Should a large change carry its own deposit?
In the kitchen example, the change adds $2,964 to a job that started with a $5,130 deposit. If the porcelain slabs have to be ordered before they're installed, you'd be paying for it out of your own account until the final invoice.
For changes that involve ordering materials, we'd suggest asking for a deposit on the change itself, using the same percentage as the original quote. At 25%, that's $741 on this change. State it on the change order, next to the price, so it's approved in the same step.
How to present a change order without friction
A change order is easier to approve when it arrives promptly and reads clearly. The customer has just asked for something, so the request is fresh, and that's the best moment to put a price on it.
Present it while you're on site if you can. Walk through the seven lines, point to the revised total, and ask for approval before you start the changed work. If the customer wants time to think, send it so they can review it that evening. Either way, avoid starting the work on a verbal yes and writing the change order afterwards, because that reverses the order the agreement depends on.
It also helps to set the expectation at the start. One line on the original quote, stating that changes are priced and approved in writing before they begin, means a change order later is simply the process both parties agreed to.
How StrikeHoney handles change orders
Everything above depends on two things. One is keeping each change attached to the original job, and the other is getting the customer's approval quickly. That's what StrikeHoney is built to do, from your phone.
- Changes stay on the quote. When a job changes after approval, the change is logged on the quote and earlier versions stay on file. Line 1 of the checklist, the reference back to the original, is already there.
- Approval from a link. Quotes go to your customer as a link by text or email, with no account and no app. They can review the quote, approve it or request a change, all from their phone.
- A signature on site. If you're standing with the customer, they can sign on your phone and the approval is captured with the job.
- Notifications as it moves. You get a push notification the moment a quote is opened, approved or gets a change request, so you know when the changed work can start.
GST/HST is worked out by province, and every feature is included on one plan, at $24/mo CAD, or $19/mo CAD on the annual plan. When the work is done, you turn the finished job into an invoice with one tap, and the deposit taken at approval is credited automatically.
The bottom line
So, what is a change order? It's the written, approved update that keeps a job's scope and price in line with the work actually being done. Use one whenever the price, materials or finish date moves, include all seven lines, and get approval before the changed work begins. Handled that way, a mid-job change becomes a routine adjustment rather than a surprise on the final invoice.
To see how changes, versions and approvals work alongside the rest of your quotes, take a look at our contractor quoting software.
Change orders, answered
StrikeHoney logs a change on the quote itself, with earlier versions kept on file. Your customer reviews and approves quotes from a link with no account, or signs on your phone if you're on site, and you get a notification when a quote is opened, approved or gets a change request. It's $24/mo CAD, with every feature included.
A change order is a written amendment to an approved quote or contract. It describes work being added, removed or substituted, states the new price and any effect on the schedule, and is signed or approved by the customer before the changed work begins.
No. A new quote covers a separate job. A change order updates the job the customer already approved, so it refers back to the original quote and shows the revised contract total. Keeping it attached to the original job avoids two sets of numbers for the same work.
We'd recommend one for any change that affects the price, the materials or the finish date, even a small one. A short written change takes a few minutes. Reconstructing a verbal agreement at the end of a job, when the invoice is higher than the customer expected, usually takes much longer.
It needs the customer's clear approval before the changed work starts. A signature on site or an approval from a link both give you a dated, written confirmation. Check your contract and your province's consumer protection rules for any specific requirements on home renovation work.
Yes, if the original work is taxable, the added work is taxed at the same rate for the same province. Show the change before tax, the tax on the change and the revised total. If a change lowers the price after you've already charged tax, the Excise Tax Act lets you credit the tax and requires a credit note to the customer.
Generally, yes, if your contract says changes must be agreed in writing. It's good practice to state that rule on the original quote, so the customer knows from the start that added work begins once the change is approved.
The deposit already paid still counts toward the job. It's credited against the revised total, and the balance owing grows by the amount of the change, including tax. Some contractors also ask for a further deposit on large changes, especially where materials must be ordered.
