Free time and materials contract template

When the scope cannot be pinned down, bill for the hours and materials you actually use. Set the labor rate, the markup on materials, a not-to-exceed amount and how often you bill, and price an estimate of the hours.

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Customer
Time and materials contract details
$
%
$
Optional. The most you will bill before the customer signs off on more.
Line items
DescriptionQtyUnitPrice
qty
$
qty
$
%
Leave at 0 if your work is not taxed where you are.
$
Total
$0.00
Time and materials contract
$0.00Subtotal
$0.00Tax
2Lines to price
This is a template, not legal advice. Check your state's rules before you use it.
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Your business name

Time and materials contract

Number
TM-1001
CustomerCustomer name
Billing
Weekly
DescriptionQtyUnitPriceAmount
Labor, estimated hours8hour
Materials, estimated at cost plus markup1each
Subtotal
$0.00
Total
$0.00
2 lines have no price yet
Notes
The lines above are an estimate of the hours and materials. You will be billed for the actual hours worked and materials used, at the rates stated.
Terms
Labor is billed by the hour at the rate stated above, in quarter-hour steps, for time on site and time to get materials for this job. Materials are billed at cost plus the markup stated above. Receipts are available on request. The contractor will not bill more than the not-to-exceed amount without the customer's written OK. Invoices are sent on the billing schedule above and are due within the number of days stated on each invoice. Daily records of hours and materials are kept and shared with each invoice. This is a template, not legal advice. Check your state's rules before you use it.
Customer signature
Contractor signature
Date

What a time and materials contract is

Instead of one fixed price, the customer pays for the labor hours at an agreed rate and the materials at cost plus an agreed markup. It suits work where nobody can see the whole job before it starts: older homes, repairs behind walls, troubleshooting, or work that grows as it goes. The risk of the unknown moves from you to the customer, so the contract has to be clear and the records have to be good.

The terms that matter

  • Labor rate per hour, and whether it differs for a helper, overtime or after-hours work.
  • Markup on materials, and whether you bill equipment rental the same way.
  • Not-to-exceed amount, so the customer knows the most they will pay without signing off on more.
  • Billing: how often, and what records come with each invoice.
  • Travel and supply runs: whether they are billed.

Time and materials or fixed price

A fixed price is simpler for the customer and rewards you for working efficiently. Time and materials protects you when the job is uncertain. Many contractors use time and materials for the investigation and a fixed price for the repair once they can see it. Our guide to flat rate vs time and materials walks through the choice.

This is a template, not legal advice. Check your state's rules before you use it.

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FAQ

What is a time and materials contract?

A contract where the customer pays for the actual labor hours at an agreed hourly rate and the materials at cost plus an agreed markup, instead of a fixed price for the whole job.

What is a not-to-exceed amount?

A cap on what you will bill without the customer's written approval. It gives the customer a limit to plan around while keeping time and materials billing. When you near it, stop and get sign-off before going further.

What markup on materials is normal in a T&M contract?

It varies by trade, region and the size of the purchases. Pick a markup that covers the time to buy, carry and return materials and the risk of carrying them, and state it in the contract so there is no surprise.

What records should I keep on a time and materials job?

Daily hours for each person, what they worked on, and every material receipt. Share them with each invoice. A daily log signed by the customer's representative makes the bill hard to argue with.

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Free Time and Materials Contract Template (T&M Agreement) | Koira