Act on the result
Review the largest expected-risk item and decide whether to mitigate, transfer or retain it.
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
Project teams setting a contingency from identified risks without mixing it with profit.
Outputs
Expected risk cost, minimum contingency, selected contingency and pricing effect.
Start here
Enter each risk probability and impact on one ex-tax basis, then choose a separate minimum allowance.
Use a different tool when: Do not use this to find completion, billing or contribution threshold for a project; use Project Break-even Planner for that decision. Use this tool to set contingency from identified project risks without treating it as profit.
Quote & capacity
Project Contingency: expected risk cost
Expected risk cost, minimum contingency, selected contingency and pricing effect.
Amounts use the same currency as your inputs. No currency conversion is performed.
Project Contingency
Combine two identified project risks with a user-entered minimum cost-rate floor, then keep the selected contingency separate from profit and known costs.
Your numbers stay in this browser
Enter known project cost before contingency; do not include either listed risk twice. Use one consistent ex-tax basis.
Enter your scenario probability for the first identified project risk.
Enter the ex-tax cost exposure if the first identified risk occurs. Use one consistent ex-tax basis.
Enter your scenario probability for the second identified project risk.
Enter the ex-tax cost exposure if the second identified risk occurs. Use one consistent ex-tax basis.
Enter the cost-rate floor to compare with the expected cost of the two identified risks.
Decision result
Use the cost and recovery rows to identify the component changing the exact reconciliation.
PDF and CSV exports stay on this device. Clean page links contain no inputs.
- Expected identified risk cost
- 2,000.00
- Minimum rate floor
- 1,000.00
- Recommended contingency
- 2,000.00
- Project cost including contingency
- 12,000.00
Scenario comparison
Each row names the assumption axis changed from the baseline.
ScenarioResultDifference
Entered scenario2,000.00Baseline
Lower Risk 2 cost impact1,900.00-100.00
Higher Risk 2 cost impact2,100.00100.00
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.
Expected identified risk cost
Expected identified risk cost
risk 1 probability × impact + risk 2 probability × impact2,000.00Result2,000.00
Uses only the entered market-neutral commercial records and assumptions. Raw engine precision is retained until display.
Project Contingency Planner formulas →Inputs used by these formula steps
- Expected identified risk costBase Cost Ex Tax
- 10,000
- Expected identified risk costRisk One Probability
- 0.5
- Expected identified risk costRisk One Impact Ex Tax
- 2,000
- Expected identified risk costRisk Two Probability
- 0.25
- Expected identified risk costRisk Two Impact Ex Tax
- 4,000
- Expected identified risk costMinimum Contingency Rate
- 0.1
Minimum rate floor
Minimum rate floor
project base cost × minimum contingency rate1,000.00Result1,000.00
Uses only the entered market-neutral commercial records and assumptions. Raw engine precision is retained until display.
Project Contingency Planner formulas →Inputs used by these formula steps
- Minimum rate floorBase Cost Ex Tax
- 10,000
- Minimum rate floorRisk One Probability
- 0.5
- Minimum rate floorRisk One Impact Ex Tax
- 2,000
- Minimum rate floorRisk Two Probability
- 0.25
- Minimum rate floorRisk Two Impact Ex Tax
- 4,000
- Minimum rate floorMinimum Contingency Rate
- 0.1
Recommended contingency
Recommended contingency
maximum of expected identified risk cost and minimum rate floor2,000.00Result2,000.00
Uses only the entered market-neutral commercial records and assumptions. Raw engine precision is retained until display.
Project Contingency Planner formulas →Inputs used by these formula steps
- Recommended contingencyBase Cost Ex Tax
- 10,000
- Recommended contingencyRisk One Probability
- 0.5
- Recommended contingencyRisk One Impact Ex Tax
- 2,000
- Recommended contingencyRisk Two Probability
- 0.25
- Recommended contingencyRisk Two Impact Ex Tax
- 4,000
- Recommended contingencyMinimum Contingency Rate
- 0.1
Project cost including contingency
Project cost including contingency
project base cost + recommended contingency12,000.00Result12,000.00
Uses only the entered market-neutral commercial records and assumptions. Raw engine precision is retained until display.
Project Contingency Planner formulas →Inputs used by these formula steps
- Project cost including contingencyBase Cost Ex Tax
- 10,000
- Project cost including contingencyRisk One Probability
- 0.5
- Project cost including contingencyRisk One Impact Ex Tax
- 2,000
- Project cost including contingencyRisk Two Probability
- 0.25
- Project cost including contingencyRisk Two Impact Ex Tax
- 4,000
- Project cost including contingencyMinimum Contingency Rate
- 0.1
Inputs used
- Project base cost
- 10,000
- Risk 1 probability
- 0.5
- Risk 1 cost impact
- 2,000
- Risk 2 probability
- 0.25
- Risk 2 cost impact
- 4,000
- Minimum contingency rate
- 0.1
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 |
|---|---|---|---|---|---|
| baseCostExTax | Enter known project cost before contingency; do not include either listed risk twice. Use one consistent ex-tax basis. | currency units/project before contingency, ex tax | 0 to 10000000 | Required | 10000 |
| minimumContingencyRate | Enter the cost-rate floor to compare with the expected cost of the two identified risks. | decimal fraction of project base cost | 0 to 1 | Required | 0.1 |
| riskOneImpactExTax | Enter the ex-tax cost exposure if the first identified risk occurs. Use one consistent ex-tax basis. | currency units/project if risk 1 occurs, ex tax | 0 to 10000000 | Required | 2000 |
| riskOneProbability | Enter your scenario probability for the first identified project risk. | decimal probability of risk 1 occurring | 0 to 1 | Required | 0.5 |
| riskTwoImpactExTax | Enter the ex-tax cost exposure if the second identified risk occurs. Use one consistent ex-tax basis. | currency units/project if risk 2 occurs, ex tax | 0 to 10000000 | Required | 4000 |
| riskTwoProbability | Enter your scenario probability for the second identified project risk. | decimal probability of risk 2 occurring | 0 to 1 | Required | 0.25 |
Project Contingency: expected risk cost
Keep contingency tied to identified uncertainty; do not count the same risk in base cost and contingency.
Formula summary
- Primary formula
- maximum of expected identified risk cost and minimum rate floor.
Data used here
- The estimate uses your inputs and the general business formula documented in the methodology.
Decision checks
Stress-test the decision
Retest higher impacts, correlated risks and a lower minimum allowance.
When this estimate can be misleading
- Use one consistent ex-tax commercial basis.
- Hours, utilisation, costs, rates and recovery targets are user inputs rather than defaults.
- This is educational business decision support, not accounting, tax, legal or financial advice.
- Keep contingency tied to identified uncertainty; do not count the same risk in base cost and contingency.
Educational estimate, not advice. See all assumptions & limitations →
Related reading
Guides to interpret the decision and its assumptions.
- How to Price a Project Quote With Scope Risk
Map scope uncertainty, cost the agreed delivery boundary and choose a commercial response before calculating the exact quote.
Read guide
Frequently asked questions
How do I set contingency from identified project risks without treating it as profit?
Review the largest expected-risk item and decide whether to mitigate, transfer or retain it.
Which planning assumptions should I stress-test?
Compare a plausible alternative scenario and verify the decision-critical assumption that changes the plan most.