Act on the result
Record the calculation and supporting cost evidence with the contract notice.
Educational only: Business decision support, not accounting, tax or legal advice.
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Update policy: Reviewed when formulas or official dependencies change.
Scope: Market-neutral small-business planning using your own assumptions.
What this planner helps you decide
Best for
Owners applying a transparent cost-escalation clause to an existing contract.
Outputs
Cost increase, passed-through amount, escalated price and unrecovered exposure.
Start here
Enter the documented cost base and clause pass-through; do not substitute an unrelated CPI assumption.
Use a different tool when: Do not use this to respond to a supplier cost increase; use Supplier Cost Increase Impact Planner for that decision. Use this tool to apply a contract escalation.
Price & margin
Cost Escalation Clause: cost increase
Cost increase, passed-through amount, escalated price and unrecovered exposure.
Amounts use the same currency as your inputs. No currency conversion is performed.
Cost Escalation Clause
Apply a documented cost escalation and measure unrecovered exposure.
Your numbers stay in this browser
Current ex-tax unit price.
Cost base covered by the clause.
Verified change applied to the cost base.
Share of the increase recoverable under the clause.
Additional fixed per-unit adjustment.
Units exposed in the period.
Decision result
Every result is derived by the registered pricing engine.
PDF and CSV exports stay on this device. Clean page links contain no inputs.
- Escalated contract price
- 103.60
- Cost Increase Ex Tax
- 4.80
- Passed Through Increase Ex Tax
- 3.60
- Escalation Rate
- 3.6%
- Period Unrecovered Cost Ex Tax
- 1,200.00
Scenario comparison
Each row names the assumption axis changed from the baseline.
ScenarioResultDifference
Current scenario103.60Baseline
Lower Cost increase rate103.15-0.45
Higher Cost increase rate104.050.45
Save these results, change an input, then compare the updated figures with this baseline.
The baseline is temporary in this tab and is not added to shared scenario links or generated reports.
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Escalated contract price
Escalated Price Ex Tax
current contract price + passed-through increase103.60 , ex taxResult103.60
Uses the entered assumptions on one consistent ex-tax commercial basis. The engine retains full precision; presentation is bounded for readability.
Cost Escalation Clause Planner formulas →Inputs used by these formula steps
- Escalated Price Ex TaxCurrent Contract Price Ex Tax
- 100
- Escalated Price Ex TaxCost Base Ex Tax
- 60
- Escalated Price Ex TaxCost Increase Rate
- 0.08
- Escalated Price Ex TaxPass Through Rate
- 0.75
- Escalated Price Ex TaxFixed Adjustment Ex Tax
- 0
- Escalated Price Ex TaxContract Units
- 1,000
Cost Increase Ex Tax
Cost Increase Ex Tax
documented cost base × cost increase rate4.80 , ex taxResult4.80
Uses the entered assumptions on one consistent ex-tax commercial basis. The engine retains full precision; presentation is bounded for readability.
Cost Escalation Clause Planner formulas →Inputs used by these formula steps
- Cost Increase Ex TaxCurrent Contract Price Ex Tax
- 100
- Cost Increase Ex TaxCost Base Ex Tax
- 60
- Cost Increase Ex TaxCost Increase Rate
- 0.08
- Cost Increase Ex TaxPass Through Rate
- 0.75
- Cost Increase Ex TaxFixed Adjustment Ex Tax
- 0
- Cost Increase Ex TaxContract Units
- 1,000
Passed Through Increase Ex Tax
Passed Through Increase Ex Tax
cost increase × pass-through rate + fixed adjustment3.60 , ex taxResult3.60
Uses the entered assumptions on one consistent ex-tax commercial basis. The engine retains full precision; presentation is bounded for readability.
Cost Escalation Clause Planner formulas →Inputs used by these formula steps
- Passed Through Increase Ex TaxCurrent Contract Price Ex Tax
- 100
- Passed Through Increase Ex TaxCost Base Ex Tax
- 60
- Passed Through Increase Ex TaxCost Increase Rate
- 0.08
- Passed Through Increase Ex TaxPass Through Rate
- 0.75
- Passed Through Increase Ex TaxFixed Adjustment Ex Tax
- 0
- Passed Through Increase Ex TaxContract Units
- 1,000
Escalation Rate
Escalation Rate
passed-through increase ÷ current contract price3.6%Result3.6%
Uses the entered assumptions on one consistent ex-tax commercial basis. The engine retains full precision; presentation is bounded for readability.
Cost Escalation Clause Planner formulas →Inputs used by these formula steps
- Escalation RateCurrent Contract Price Ex Tax
- 100
- Escalation RateCost Base Ex Tax
- 60
- Escalation RateCost Increase Rate
- 0.08
- Escalation RatePass Through Rate
- 0.75
- Escalation RateFixed Adjustment Ex Tax
- 0
- Escalation RateContract Units
- 1,000
Period Unrecovered Cost Ex Tax
Period Unrecovered Cost Ex Tax
(cost increase − passed-through increase) × contract units1,200 , ex taxResult1,200.00
Uses the entered assumptions on one consistent ex-tax commercial basis. The engine retains full precision; presentation is bounded for readability.
Cost Escalation Clause Planner formulas →Inputs used by these formula steps
- Period Unrecovered Cost Ex TaxCurrent Contract Price Ex Tax
- 100
- Period Unrecovered Cost Ex TaxCost Base Ex Tax
- 60
- Period Unrecovered Cost Ex TaxCost Increase Rate
- 0.08
- Period Unrecovered Cost Ex TaxPass Through Rate
- 0.75
- Period Unrecovered Cost Ex TaxFixed Adjustment Ex Tax
- 0
- Period Unrecovered Cost Ex TaxContract Units
- 1,000
Inputs used
- Current contract price
- 100
- Documented cost base
- 60
- Cost increase rate
- 0.08
- Pass-through rate
- 0.75
- Fixed adjustment
- 0
- Contract units
- 1,000
Open this calculator with preset values
This calculator supports documented, shareable scenario URLs. Compatible assistants and applications can construct links using the parameters below.
Scenario links contain only allowlisted numeric and closed-choice inputs shown in the URL; Margin101 excludes free text and identifying fields. Anyone you share the URL with can read those numbers, so do not include private or identifying data.
| Parameter | Meaning | Unit | Allowed values | Presence | Default |
|---|---|---|---|---|---|
| contractUnits | Units exposed in the period. | whole contract units/comparison period | 0 to 10000000 | Required | 1000 |
| costBaseExTax | Cost base covered by the clause. | currency units/contract unit, ex tax | 0 to 10000000 | Required | 60 |
| costIncreaseRate | Verified change applied to the cost base. | proportional increase in documented cost base | 0 to 0.99 | Required | 0.08 |
| currentContractPriceExTax | Current ex-tax unit price. | currency units/contract unit, ex tax | 0 to 10000000 | Required | 100 |
| fixedAdjustmentExTax | Additional fixed per-unit adjustment. | currency units/contract unit, ex tax | 0 to 10000000 | Required | 0 |
| passThroughRate | Share of the increase recoverable under the clause. | proportion of cost increase passed through to client | 0 to 0.99 | Required | 0.75 |
Cost Escalation Clause: cost increase
The escalated price applies the documented pass-through share to the verified cost-base increase.
Formula summary
- Primary formula
- escalated price = current price + (cost increase × pass-through) + fixed adjustment
Data used here
- The estimate uses your inputs and the general business formula documented in the methodology.
Decision checks
Stress-test the decision
Check the clause cap, eligible cost base and effective period before issuing the escalation.
When this estimate can be misleading
- Results depend on the accuracy and consistent basis of your inputs.
- The planner does not predict demand, competitor behaviour or supplier terms.
- Use the result as educational business decision support, not accounting, tax or legal advice.
- The escalated price applies the documented pass-through share to the verified cost-base increase.
Educational estimate, not advice. See all assumptions & limitations →
Related reading
Guides to interpret the decision and its assumptions.
- Small-Business Pricing: A Decision Framework
Build a price from costs and contribution, then test margin, volume, capacity and customer-value assumptions in a clear decision sequence.
Read guide
Frequently asked questions
How do I apply a contract escalation?
Record the calculation and supporting cost evidence with the contract notice.
Which planning assumptions should I stress-test?
Compare a plausible alternative scenario and verify the decision-critical assumption that changes the plan most.