Time and materials (T&M)

Time-and-materials (T&M) is a billing method where a contractor charges for actual labor hours and material cost plus markup, instead of a fixed price agreed in advance.

T&M billing shows up when the scope can't be nailed down ahead of time — emergency repairs, unknown existing conditions, or small add-on work that isn't worth writing a full change order for. The contractor tracks hours and materials as the work happens and bills against that record, usually with a markup on materials and a burdened labor rate.

The tradeoff is that T&M only works if the documentation is airtight. Without a signed daily ticket, the GC or owner has no way to verify hours worked or materials used, and the burden of proof sits with whoever's trying to collect.

Example

A plumbing sub gets a call to fix a burst pipe discovered behind drywall on an otherwise fixed-price remodel. There's no line item for it in the contract, so the work runs T&M: two hours of labor, a coupling and section of pipe, signed off by the site super on a daily ticket before the sub leaves.

Where this goes wrong on real jobs

Undocumented T&M work is the most common way field crews give away margin for free.

“Lost ~$4k this month on unbilled T&M work.”

— a specialty sub on r/Construction

Related terms

T&M ticketA T&M ticket (or daily ticket) is the field record of hours worked and materials used on a time-and-materials task, signed by the client or GC's representative on-site the same day.Change orderA change order is a signed, priced amendment to a construction contract that adds, removes, or modifies scope, cost, or schedule after work is already under contract.Back-chargeA back-charge is a deduction one party makes from another's payment to cover the cost of correcting deficient work, cleanup, or damage — without a signed change order authorizing it.

Used in

Unbilled T&M work for foremenForemen and the crews they run, whose field changes turn into T&M work that never gets billed.Unbilled T&M work for electrical subcontractorsElectrical subs who suspect field changes and service calls aren't all making it onto an invoice.

Next step

Where this shows up in Datumel:

T&M Leak Audit$1,499 one-time

Where unbilled time-and-materials work leaks through your field documentation. Built for subs and foremen eating field changes that should be billed.

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