Why a Do and Charge Contract Can Be the Smartest Way to Build

When planning a renovation or new build, one of the first decisions you'll make is how your builder structures the contract.

While fixed-price contracts are commonly used in the construction industry, many high-end residential projects benefit from a Do and Charge contract (also known as a Cost-Plus contract).

At its core, a Do and Charge contract prioritises transparency, flexibility, and collaboration — qualities that are particularly valuable when building or renovating a home where details often evolve during the process.

Below we explain how Do and Charge works and why many clients prefer this approach.

What Is a Do and Charge Contract?

A Do and Charge contract is a construction agreement where the client pays for the actual cost of labour, materials, subcontractors, and project expenses, plus an agreed builder’s margin.

Rather than committing to a rigid fixed price from the outset, this model reflects the true cost of the work as it happens, allowing the project to adapt as decisions are refined and site conditions are revealed.

This approach is particularly suited to architecturally designed homes, renovations, and complex builds, where scope and details often evolve during construction.

How a Do and Charge Contract Works

1. Agreement on Rates and Margin

Before work begins, the builder provides:

• A schedule of hourly labour rates

• An agreed margin or administration fee

• An outline of how materials and subcontractor costs will be charged

This ensures the client has a clear understanding of how project costs are calculated.

2. Open-Book Transparency

One of the key advantages of Do and Charge is complete transparency.

Clients receive documentation such as:

• Supplier invoices

• Subcontractor invoices

• Timesheets

• Purchase receipts

This open-book approach allows clients to see exactly where their investment is going throughout the build.

3. Regular Progress Billing

Instead of large milestone payments, invoices are typically issued weekly or fortnightly.

Each invoice outlines:

• Labour hours worked

• Materials purchased

• Subcontractor costs

• Equipment or specialist hire

• The agreed builder’s margin

This regular reporting helps clients track progress and manage their budget in real time.

4. Flexible Scope Management

In residential construction, plans often evolve.

A Do and Charge contract allows:

• Design refinements during construction

• Adjustments based on site conditions

• Upgrades or material changes without complex contract variations

This flexibility is particularly valuable in renovations, heritage homes, and architecturally designed builds.

The Benefits for Clients

Full Cost Transparency

Every cost is documented and visible. Clients can follow how funds are allocated throughout the project and make informed decisions along the way.

Flexibility to Refine the Design

Clients can adjust finishes, layouts, or materials during construction without the stress of formal variations or renegotiating fixed prices.

Avoid Paying Hidden Contingencies

Fixed-price contracts often include built-in contingencies to cover unknown risks.

With Do and Charge, clients pay only for the actual work performed, rather than paying upfront allowances for potential issues that may never arise.

Projects Can Start Sooner

Because every design detail does not need to be finalised before signing the contract, construction can begin sooner while documentation continues to develop.

A Collaborative Building Experience

Do and Charge encourages open communication and shared decision-making between the builder, architect, and client — creating a more collaborative process.

The Benefits for Builders

Fair Compensation for Actual Work

Builders are paid for the real labour and resources required to complete the project, rather than estimating unknown risks upfront.

Reduced Administrative Complexity

Because scope changes can be incorporated naturally, there is less time spent on preparing and negotiating formal variations.

Stronger Client Relationships

Transparency builds trust. Clients feel more confident knowing they have visibility over the project costs and progress.

Faster Response to Site Conditions

Unexpected structural issues or design refinements can be addressed immediately without delaying work for contract amendments.

Built-In Protections for Both Parties

A well-structured Do and Charge contract still includes clear protections, including:

• Agreed hourly labour rates

• Defined builder’s margin or fee structure

• Regular invoicing schedules

• Full documentation requirements

• Insurance and licensing obligations

• Dispute resolution processes

All costs are supported by invoices, receipts, and timesheets, ensuring a clear audit trail for both parties.

Clients also maintain ongoing control of the budget, as regular billing allows them to adjust the direction of the project if required.

When a Do and Charge Contract Works Best

This type of contract is particularly well suited to:

• Renovations where hidden structural conditions may exist

• Architecturally designed homes

• Projects where design details are evolving

• Builds involving specialist trades or materials

• Time-sensitive projects where work needs to begin quickly

• Clients who value transparency and involvement in decision-making

A Do and Charge contract offers a transparent, flexible, and collaborative approach to residential construction.

By focusing on actual costs rather than fixed estimates, it allows projects to evolve naturally while maintaining full visibility over budget and progress.

For clients undertaking complex renovations or custom homes, this approach often results in better outcomes, stronger collaboration, and a more responsive building process.

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