What is Time and materials?
Under a time and materials contract, the provider records the hours worked and the materials used and bills them against agreed rates. The final cost is known only when the work is finished, which makes the model flexible when the scope is unclear, and it shifts the risk of overruns to the customer.
It differs from a fixed price contract, where the provider quotes a total for a defined scope and carries the risk if the work takes longer. It also differs from a retainer or managed service, where the customer pays a recurring fee for an agreed service. Many agreements mix the models, for example a fixed price for a planned rollout and T&M for extra work outside the scope.
Terms vary. Contracts may include minimum call out hours, travel time, after hours multipliers, a not to exceed cap, or separate treatment of parts and expenses. This page does not state any rate. Always read how time is rounded, when the clock starts and who approves extra hours.
How it shows up in practice
- Ask for a not to exceed amount or an approval step before the budget is passed, so the cost cannot grow without a decision.
- Agree what counts as billable time: on site time, travel, waiting for access, and remote preparation.
- Define who signs the timesheet on site, and how disputes about hours are handled.
- Decide how parts are billed and whether the customer or the provider supplies them.