What is a prime cost item in a pool contract?
A prime cost item is an allowance for something you have not picked yet — tiles, coping, lights, a heater. The number in your quote is not the price you pay, and the regulator's own contract form explains exactly why.
A prime cost item is a supply-only allowance for a fixture or fitting you have not chosen when you sign — tiles, coping, lights, a chlorinator. Queensland's contract schedule adds the builder's markup, 10% if the contract states nothing, then GST. A $4,000 tile allowance bills at $4,840, a 21% rise.
The short answer
- A prime cost item covers supply only. A provisional sum covers supply and the labour to install it.
- The QBCC contract schedule applies the contractor's markup, and 10% if nothing is stated, before GST.
- Worked from the regulator's own example: $4,000 becomes $4,840 once markup and GST are applied.
- Both must be calculated with reasonable care and skill — a deliberately low allowance is not lawful.
- The QBCC's own note on the form: these allowances “should be kept to a minimum”.
| Prime cost item | Provisional sum | |
|---|---|---|
| What it covers | Supply and delivery of a fixture or fitting | A contracted service — supply, labour and other costs |
| Labour included? | No | Yes — the schedule has a line for estimated labour cost |
| Typical on a pool | Tiles, coping stone, lights, chlorinator, heater, handrail | Rock removal, extra excavation, retaining, service relocation |
| Priced by | Quantity × unit cost, excl. GST | Best estimate of the whole service, excl. GST |
| Markup added | Contractor's stated markup, 10% if nothing is stated | Contractor's stated markup, 10% if nothing is stated |
| Then | GST on the marked-up total | GST on the marked-up total |
| If the real cost is higher | You pay the difference, plus markup and GST on it | You pay the difference, plus markup and GST on it |
The arithmetic the allowance hides
The Queensland Building and Construction Commission publishes the schedule its own Level 1 contract uses, and the worked example on it is the clearest statement of how these numbers behave. Supply of floor tiles for a living area: 100m² at $40/m² is $4,000 excluding GST. Add 10% markup and it is $4,400. Add GST and it is $4,840.
So the figure written into the contract is $4,000 and the figure you pay, if you choose exactly the tile the builder allowed for, is $4,840. That is 21% more than the allowance, and nothing has gone wrong — that is the form working as designed.
The mechanism people miss is the default. The schedule's markup column reads “PLUS Contractor's markup ($ amount or %) — 10% if nothing stated”. A blank is not zero. If your contract is silent on markup, 10% applies to every prime cost item and every provisional sum in it.
Run the same arithmetic across a pool: a $6,000 tiling allowance, a $2,500 lighting allowance and a $3,000 heater allowance total $11,500 on the page and $13,915 at the bank.
Why the labour line is the real difference
A prime cost item is defined as a fixture or fitting that has not been selected, or whose price is not known, when the contract is entered into, and for which a reasonable allowance is made for supply and delivery. Installation is not in it.
A provisional sum is different in kind, not degree. It is a contracted service, and the QBCC schedule asks the builder to state the estimated quantity and unit cost of materials, the estimated labour cost, and any other costs such as equipment hire. Rock removal is the classic pool example: the machine, the operator and the truck are all inside the number.
This matters when an allowance is exceeded. Go over a prime cost tile allowance and you pay the extra tile. Go over a provisional sum for rock and you pay extra material, extra labour and extra plant. The same $2,000 overrun does not mean the same thing on the two lines. We cover the second one in full on what a provisional sum means in a pool quote.
“Reasonable care and skill” is a legal standard, not a courtesy
The QBCC requires that allowances for prime cost items and provisional sums “will be calculated with reasonable care and skill”. That phrase is doing real work. An allowance pitched deliberately low to make a quote look competitive is not a conservative estimate — it fails the standard the contract itself sets.
The Commission goes further on the schedule, in a note addressed to both parties: these allowances “should be kept to a minimum to reduce uncertainty about the final Contract Price”. A pool quote carrying eight prime cost items is not more detailed than one carrying two. It is less certain.
Contracts of $20,000 or more are Level 2 contracts in Queensland, which is nearly every pool. A Level 2 contract must give you the QBCC Consumer Building Guide before you sign and must disclose potential price increases on its first page.
The four questions to ask before you sign
1. What markup applies to prime cost items and provisional sums? If the contract does not say, the default is 10%. Ask for it in writing and check it is on the schedule, not just in conversation.
2. Is this allowance a real quote or a placeholder? Ask what product the number was built from. “$6,000 for tiles” means nothing. “$6,000 is 60m² of this specific tile at $100/m²” can be checked in a showroom in an afternoon.
3. Can this be converted to a fixed price? If you have already chosen the tile, the coping and the light, there is no reason for an allowance at all. Every item you decide before signing is an item that cannot move.
4. What happens if I choose something cheaper? Ask whether you receive the difference back, and whether markup comes off with it. The answer is not automatic and it belongs in the contract.
Take those four questions into every quote you collect — and get at least three so the allowances can be compared against each other rather than against nothing.
Common questions
What is the difference between a prime cost item and a provisional sum?
Does the builder add a markup to a prime cost item?
Can a builder set a prime cost allowance deliberately low?
Do these rules apply outside Queensland?
Sources
- QBCC — Prime cost items & provisional sums schedules (Level 1 contract)
- QBCC — Contracts and agreement types
- QBCC — New home construction contract general conditions
General information only, current at 2026-09-12. Pool rules differ by state and by council, and penalty amounts are updated regularly. Confirm your own obligations with your council or a registered inspector before acting.
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