Time and Materials
What is Time and Materials?
Time and materials (T&M) is a billing model where the customer pays for the actual labor hours worked, charged at an hourly rate, plus the actual cost of materials used, often with a markup on parts. The final bill is not known until the work is done, because it tracks what the job actually consumed. T&M is the opposite of flat-rate pricing: here the customer, not the operator, carries the risk that a job runs long. It suits open-ended or unpredictable work — diagnostics, repairs of unknown scope — where pricing a fixed figure up front would force either a padded quote or a money-losing one.
Time and materials bills the job as it actually unfolds: every hour worked at the agreed rate, plus the parts at cost or with a stated markup. Because the total is not fixed in advance, the model fits work whose scope you genuinely cannot see from the curb — a fault that might take an hour or several to trace, a repair that depends on what is found once things are opened up.
The defining feature is who carries the overrun. Under T&M the customer pays for the time the job takes, so the operator is not gambling on an estimate the way flat-rate work requires. The hourly figure still has to clear the operator’s fully loaded cost per hour — worth pinning down with a loaded labor-cost calculation before it goes on a quote. That protection comes with an obligation: the billable hours and material costs have to be tracked and documented honestly, because the bill is only as trustworthy as the records behind it.
T&M and flat rate are not rivals so much as tools for different jobs, and scope that grows mid-job is usually handled with a documented change order rather than by silently expanding the bill.