Event budget contingency: how much, and how to show it.
Contingency is the money in the budget for what nobody can price yet. Set it too low and surprises come out of your margin; hide it and the client stops trusting your numbers. Here is how planners handle it.
A common starting point
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About 10%
Many planners start with about 10% of the subtotal, before agency fee and VAT.
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Around 5% when prices are fixed
Venue, catering and hotel are signed, guest numbers are firm, the programme is final.
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15% or more when much is open
A new venue or city, guest numbers not confirmed, a programme still changing, or prices in another currency.
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Show it, don't hide it
Put contingency on its own line. A visible buffer is easier to agree than padded prices.
What contingency is for
Contingency covers costs that are real but can't be priced yet, inside the scope the client already approved:
- A vendor's final quote comes in higher than your estimate
- Overtime on the night, a late finish or a longer bar
- Replacing something that broke or didn't arrive
- Exchange-rate moves on costs in another currency
- Small items nobody thought of until the week of the event
Contingency is not for client changes
If the client asks for something new, like 30 more guests, a second dinner or a bigger stage, that is a change, not contingency. It needs its own line, a reason and the client's approval.
Mixing the two is how agencies lose money: the buffer gets spent on extras, and when a real surprise comes, there is nothing left.
How to agree it with the client
- Agree the percentage and what it covers before the first approval
- Agree who decides when it is used, and how you report it
- Agree what happens to the unused part: usually it is not invoiced
- Log every use of it with a reason, like any other change
Questions
Is contingency calculated before or after the agency fee?+
Usually on the subtotal of the costs, before agency fee and VAT. Whatever you choose, write it in the budget so the client can follow the numbers.
Does the client pay for unused contingency?+
Usually not. Most agencies only invoice the part that was actually used, with each use explained. Agree this up front.
How do I track what the contingency was used for?+
Write every use with its amount and reason. In Yestivo, every change after approval needs a reason and the client's yes, so the record builds itself.
Bring one real budget. See it under control.
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