Example
14 hours at $95, materials $420 plus 30% markup, capped at $2,000 without further approval.
Also called T&M, cost plus, or day rate work.
What it means in practice
Time and materials suits work whose scope cannot be pinned down: emergency repairs, investigation, anything behind a wall. The client carries the risk of the scope, so give them a cap they approve in advance.
Bill it with the detail to back it up: dates, hours from a timesheet calculator, what was done, and receipts for materials at cost plus your usual markup.
Where it shows up on the paperwork
Hours with dates and what was done, materials at cost with the markup shown or built in, and the cap if one was agreed. Receipts attached where the client expects them.
What goes wrong
- Working T&M with no cap, which most clients will not accept twice.
- Recording hours at the end of the week from memory.
- Not saying what the rate includes, so travel and clean-up become an argument at invoice time.
Common questions
When should I use time and materials instead of a fixed price?
When the scope genuinely cannot be pinned down: emergency work, investigation, anything behind a wall. Fixed price the parts you can see and put the unknown on T&M.
Should a time and materials job have a cap?
Yes, agreed in advance, with the rule that work stops at the cap unless the client approves more. It is what makes an open-ended arrangement acceptable to the person paying.