If you’ve received an estimate from me for a remodeling project, you may notice a few line items labeled “allowance.” If you haven’t worked with a contractor before, it may not be immediately obvious what that means.
So, let’s walk through an example.
Let’s say I’m sitting down with John and Jane Smith to go over an estimate for their bathroom remodel. Their estimate looks something like this:
- Labor: $8,000
- Necessary Materials: $2,000
- Toilet Allowance: $500
- Shower Trim Allowance: $750
- Floor & Shower Tile Allowance: $2,000
The estimated project total would be $13,250.
The first two items are fairly straightforward. The $8,000 covers the labor required to complete the work described in the estimate.
The $2,000 in necessary materials covers the materials I know I’m going to need to complete the project properly — things such as construction materials, plumbing supplies, waterproofing materials, fasteners, adhesives, backer materials, and other items that generally aren’t based on the homeowner’s personal style.
The allowances are different.
An Allowance Is a Budget for Something You Haven’t Selected Yet
When I put a $500 toilet allowance on John and Jane’s estimate, I’m not saying that their toilet will cost exactly $500.
I’m saying:
“I have included up to $500 in the estimate for you to select the toilet you want.”
Maybe John and Jane find a toilet they really like for $425. Great. They are $75 under the allowance.
If they decide they want a $650 toilet instead, that’s fine too. They would simply be $150 over the allowance.
The allowance gives us a realistic number to use when I prepare the estimate without forcing the homeowner to choose every fixture, tile and finish before we even know whether they want to move forward with the project.
The Same Thing Applies to the Shower Fixtures
In this example, I’ve included a $750 shower trim allowance.
That gives John and Jane a $750 budget to choose the visible shower components we’ve discussed for their project.
If the fixtures they select cost $700, they are under the allowance.
If they decide they really like a particular fixture package that costs $900, they can absolutely choose it. They would just be responsible for the additional $150.
The important point is that an allowance does not limit what you can choose. It establishes the amount already included in the estimate.
Tile Is One of the Best Examples
Tile can vary tremendously in price.
For John and Jane’s bathroom, I’ve included a $2,000 allowance for the floor and shower tile.
They might choose a good-quality porcelain tile that keeps them comfortably within that budget.
Or they may walk into a tile showroom and fall in love with something more expensive.
That’s completely fine.
If their final tile selections total $2,400, then the project would increase by the $400 difference.
If their tile comes in at $1,750, they would be $250 under the allowance.
This lets John and Jane make their selections based on what they actually like instead of me choosing finishes for them just to arrive at a fixed number.
Why I Use Allowances
I use allowances because I think they make an estimate clearer and more flexible.
Before a bathroom remodel begins, we can usually determine fairly accurately what the construction itself is going to require. What I can’t always predict is whether you’re going to choose a $300 toilet or a $700 toilet, a basic ceramic tile or a premium porcelain tile.
Those are personal decisions, and I would rather let you make them.
An allowance lets me give you a realistic overall project estimate while still giving you control over the products and finishes that will ultimately go into your home.
What Happens to the Final Price?
Using our example, John and Jane begin with an estimated project price of $13,250.
That number already includes:
$3,250 for the three allowance items.
As they make their selections, we compare the actual cost of those items with the allowances.
If their selections stay within the allowances, there is no increase associated with those items.
If they choose more expensive products, the difference is added.
If their selections cost less, the difference is deducted.
That way, everyone knows exactly where the numbers are coming from.
The Bottom Line
When you see an allowance on one of my estimates, think of it as money that has already been set aside in the project price for you to choose that particular item.
It isn’t an extra charge on top of the estimate.
It also doesn’t mean you have to spend the entire amount.
It simply gives us a reasonable budget to work with until the final product is selected.
My goal is for you to understand where your money is going before the project begins. Allowances are one of the ways I can give you an accurate estimate while still giving you the flexibility to choose the fixtures, tile and finishes that make the project your own.