Quoting guide

What a building quote should include in Australia

A quote does two jobs: it prices the work and it sets the scope, so the client knows what they are buying before they sign. Most quotes get the price right and leave the scope thin. That gap is where variations and disputes come from. Here is what belongs in the document, with a worked kitchen renovation marked up.

For AU residential and small commercial9 minute read

The seven parts of a quote

A quote a client can read without ringing you has seven parts. The example below is a kitchen renovation priced at a fixed sum with two allowances carved out. The numbers are illustrative, not a real job.

What each part is doing:

• 1Scope of works. Plain words for what you will do. A vague scope is the single biggest cause of later arguments, because every gap gets read in the client's favour.
• 2Inclusions. The work and materials that sit inside the price. Be specific. "Tiling" leaves out whether you are supplying the tiles.
• 3Exclusions. What the price does not cover. The exclusions builders forget cost the most: asbestos if found, structural changes, approvals, anything "while you're there".
• 4Allowances. Items you cannot fix yet, shown as a named dollar figure that adjusts. Keep them out of the lump sum so a $900 tap upgrade does not look like a blow-out.
• 5The price. One clear figure for the fixed scope, with allowances listed beside it, not buried inside it.
• 6Price basis. Say whether the figure is fixed or an estimate, and on what. This one line decides who carries the risk if the job runs long.
• 7Validity and acceptance. An expiry date and a clear way to say yes. Without an expiry, a three-month-old quote comes back at last year's prices.

Quote or estimate, and why the word matters

A quote is a fixed price for a defined scope. An estimate is your best assessment of what the work is likely to cost, and it can move. The two carry the risk differently: under a fixed-price quote you wear the overrun, under an estimate the client does. Clients often read "estimate" as a quote, so if the figure can change, write the word "estimate" on the document and say what would move it.

PC items and provisional sums

Both are allowances, and they are not the same thing.

• A prime cost (PC) item is an amount for a product the client has not chosen yet, supply only: tapware, floor tiles, the oven. You allow a figure and adjust to what they pick.
• A provisional sum (PS) covers work you cannot price until it is opened up: waterproofing, levelling an out-of-true floor, an unknown sub-floor. It covers supply and install, and adjusts to the actual cost.

Show each one as a line with its own figure and the word "allowance", so when it adjusts on a progress claim the client already understood it would. HIA and Master Builders contracts both handle PC items and provisional sums this way; using their wording keeps your quote and your contract speaking the same language.

GST, shown so the total is not a surprise

If you are registered for GST, the tax applies to building work and the client is entitled to a tax invoice. Show the amount ex GST, the GST, and the total including GST as three lines. A single "$35,640 inc GST" is fine, but the client who only registers the bigger number is the client who feels stung later. Tabular figures, right-aligned, read as a real quote, not a guess.

A thin line vs a clear one

The same job, two ways. The thin version looks simpler and reads as riskier to a nervous client, because everything it leaves out is theirs to imagine.

When the quote becomes a contract

Once the client accepts, the quote is usually the basis of the contract, so the words you wrote are the words you are held to. For work over your state's threshold you will move onto a written building contract (a HIA or Master Builders form, or your own), which carries the terms a bare quote does not: progress claims, retention, defects liability, and what practical completion means. The cleaner the quote, the less rewriting at contract.

• Progress claims: staged payments as the work hits milestones, not one bill at the end.
• Retention: a small percentage the client holds back until defects are made good.
• Defects liability period: the window after handover in which you come back and fix defects, commonly several months.
• Practical completion: the job is finished bar minor defects and the client can use it; it starts the defects clock and the final claim.

The checklist

Before you send a quote, run it against this.

• Scope of works in plain wordsWhat you will do, room by room or trade by trade.
• Inclusions and exclusions, both listedSpecific exclusions, not "anything not listed above".
• PC items and provisional sums called outEach as a named figure that adjusts to actual, not buried in the total.
• Price basis stated: fixed or estimateAnd GST shown as its own line.
• Validity date and a way to acceptAn expiry so the price does not drift, and a deposit or signature to confirm.