Price Escalator Impact Calculator

See how escalators compound over time—and what caps/floors actually do—before you sign or renew.

Educational only. This is not financial or legal advice. Validate terms against your contract language.

Processed in-browser. Nothing is stored.

Inputs

$

The Year 1 contract value

%

Annual increase percentage

Contract duration in years

How increases are calculated

Optional: Cap & Floor

%

Max annual increase

%

Min annual increase

Results

Enter inputs and click Calculate

How to use this tool

  1. 1Enter the current annual cost (Year 1).
  2. 2Enter the escalator % (e.g., 3%).
  3. 3Enter the term length (years).
  4. 4Optionally add a cap % (maximum increase per year) or floor % (minimum increase per year).
  5. 5Review the schedule and copy/download it.

What the results mean

Escalators usually compound: each year builds on the last.

Even "small" rates create meaningful dollars over multi-year terms.

Caps and floors can dramatically change risk:

  • •Caps protect you in high-inflation periods
  • •Floors protect vendors (and hurt you) in low-inflation periods

Example (sanity check)

If Base = $100,000, Escalator = 3%, Term = 5 years, Compounded:

Year 1

$100,000

Year 2

$103,000

Year 3

$106,090

Year 4

$109,273

Year 5

$112,551

Total paid:≈$530,914
Flat total:$500,000
Increase:+$30,914 (+6.18%)

Common pitfalls

  • Treating compounding like simple increases (underestimates real cost)
  • Forgetting the escalator applies to "base + add-ons" in some contracts
  • Not checking whether escalator is tied to CPI (this tool assumes fixed %)
  • Missing the "floor" clause that guarantees a minimum increase

Change log

v1.0 (2026-01): Latest release