When a project uses Allowances, Buildern tracks three values for every allowance item: the Allowance Original (the budgeted amount), the Allowance Actual (the real cost once it's determined), and the Allowance Difference (the gap between the two). This article explains exactly how each of these values is calculated — on the Estimate, in Selections, and on Client Invoices — and how the calculation changes based on On Cost vs. On Price, Recoverable vs. Non-Recoverable Purchase Tax, and whether Allowance Actual comes from a Selection or a Bill.
Key Terms
Allowance Original — the budgeted allowance amount set on the estimate.
Allowance Actual — the real cost of the allowance once it's determined, either from a client Selection or from a linked Bill.
Allowance Difference — the gap between Allowance Actual and Allowance Original. This is the amount that flows into Change Orders/Variations and Client Invoices.
Allowance Original (on the Estimate)
The Allowance Original is calculated differently depending on whether the allowance uses the On Cost or On Price setting (controlled by the Allowance on Price toggle when creating or editing the allowance item).
On Cost (Allowance on Price disabled)
Allowance Original = Builder Cost Including Purchase Tax
This calculation is the same whether the Purchase Tax on the allowance is Recoverable or Non-Recoverable.
On Price (Allowance on Price enabled)
Recoverable Purchase Tax
Allowance Original = Builder Cost Excluding Purchase Tax + Markup + Sales TaxNon-Recoverable Purchase Tax
Allowance Original = Builder Cost Including Purchase Tax + Markup + Sales Tax
How Allowance Actual Is Determined: Selections or Bills
Buildern calculates Allowance Actual in one of two ways, controlled by the "Calculate Allowance Actual Price Based on Bills" checkbox in Current Project Settings:
Disabled (default) – Allowance Actual is based on the client's Selection tied to the allowance.
Enabled – Allowance Actual is based on the Bill(s) linked to the allowance instead.
When Based on Selections
Each selection option has its own Recoverable/Non-Recoverable Purchase Tax setting, and this determines what the Allowance Actual (the Selection Price) includes:
Recoverable Purchase Tax
Allowance Actual = Unit Cost + Markup + Sales Tax
(Purchase Tax is not included)Non-Recoverable Purchase Tax
Allowance Actual = Unit Cost + Purchase Tax + Markup + Sales Tax
(Purchase Tax is included)
ℹ️ Note: You can view both the Original Allowance and the Actual Allowance amounts in the top-right corner of the Selections page.
When Based on Bills
When you create a Bill from an allowance, the Allowance Original amount is automatically set as the bill's Amount Including Tax.
If you manually change the Unit Cost on that bill, the resulting Amount Including Tax — and therefore the new Allowance Actual — depends on the bill's tax configuration:
Exclusive – The Unit Cost is treated as excluding tax, so Purchase Tax is added on top. Amount Including Tax increases accordingly, and that becomes the new Allowance Actual.
Inclusive – The Unit Cost already includes tax, so Unit Cost and Amount Including Tax are the same value. That amount becomes the new Allowance Actual.
ℹ️ Note: For Bills, you can compare the Original and Actual columns under the Allowances section of the Budget tab.
Allowance Difference
Allowance Difference = Allowance Actual − Allowance Original
This is the value that gets added to Change Orders/Variations and Client Invoices.
How Allowance Difference Is Invoiced to Clients
On the Client Invoice, the Allowance Difference is recalculated in Excluding Sales Tax terms before Sales Tax is added back to produce the invoiced Amount Including Tax. Which table applies depends on the Calculate Allowance Actual Price Based on Bills setting above.
Client Invoice Calculation — When Allowance Actual Is Based on Selections
Scenario | Allowance Original (Excl. Sales Tax) | Allowance Actual (Excl. Sales Tax) | Allowance Difference (Excl. Sales Tax) | Amount Including Tax |
Recoverable — On Cost | Builder Cost Excluding Purchase Tax | Selection Cost Excluding Purchase Tax + Markup | Allowance Actual − Allowance Original | Allowance Difference + Sales Tax |
Recoverable — On Price | Builder Cost Excluding Purchase Tax + Markup | Selection Cost Excluding Purchase Tax + Markup | Allowance Actual − Allowance Original | Allowance Difference + Sales Tax |
Non-Recoverable — On Cost | Builder Cost Including Purchase Tax | Selection Cost Including Purchase Tax + Markup | Allowance Actual − Allowance Original | Allowance Difference + Invoice Sales Tax |
Non-Recoverable — On Price | Builder Cost Including Purchase Tax + Markup | Selection Cost Including Purchase Tax + Markup | Allowance Actual − Allowance Original | Allowance Difference + Invoice Sales Tax |
Client Invoice Calculation — When Allowance Actual Is Based on Bills
Scenario | Allowance Original (Excl. Sales Tax) | Allowance Actual (Excl. Sales Tax) | Allowance Difference (Excl. Sales Tax) | Amount Including Tax |
Recoverable — On Cost | Builder Cost Excluding Purchase Tax | Bill Cost Excluding Purchase Tax | Allowance Actual − Allowance Original | Allowance Difference + Sales Tax |
Recoverable — On Price | Builder Cost Excluding Purchase Tax + Markup | Bill Cost Excluding Purchase Tax | Allowance Actual − Allowance Original | Allowance Difference + Sales Tax |
Non-Recoverable — On Cost | Builder Cost Including Purchase Tax | Bill Cost Excluding Purchase Tax | Allowance Actual − Allowance Original | Allowance Difference + Invoice Sales Tax |
Non-Recoverable — On Price | Builder Cost Including Purchase Tax + Markup | Bill Cost Excluding Purchase Tax | Allowance Actual − Allowance Original | Allowance Difference + Invoice Sales Tax |
ℹ️ Note: In the Bills-based table, Allowance Actual is Bill Cost Excluding Purchase Tax in every row — including the Non-Recoverable rows, where the Selections-based table instead uses cost Including Purchase Tax. This reflects how the source document distinguishes the two paths.
Claim Amount on the invoice (Inclusive vs. Exclusive) follows the invoice's own Amounts Are setting, the same as it does for other invoice line types.
ℹ️ Note: Change Orders/Variations differ from Client Invoices in one respect: Change Orders don't have item-level Sales Tax, so the project's default Sales Tax is used instead when the Allowance Difference is added there.
Where These Calculations Appear in Buildern
Selections page – Original and Actual Allowance amounts are shown in the top-right corner.
Budget tab → Allowances section – Original and Actual columns, for allowances calculated from Bills.
Change Orders/Variations – the Allowance Difference can be included here.
Client Invoices – the Allowance Difference can be added via the Invoice for Allowance Difference option on Progress Payments and Schedule of Values/Completion Percentage invoices.
In upcoming articles, we'll explore more features and tools to help you get even more out of Buildern.
Happy Building!