Free Time and Materials Invoice Template (2026)

A time and materials (T&M) invoice bills the client for actual labor hours plus actual material cost, usually with a markup on materials. Instead of one fixed price, you charge for what the job really takes. It is the standard way to bill repairs, demo with hidden scope, and insurance work where you cannot see everything before you start. A good T&M invoice separates labor (hours times rate) from materials (cost plus markup) so the client sees exactly what they are paying for. Use the time and materials invoice template above to build one in minutes.

Most remodelers add 15% to 25% to material cost. Plumbing and electrical often run 20% to 35% because of specialty parts and returns, and emergency service calls can hit 25% to 50%. The markup is not pure profit. It pays for your trips to the supply house, waste, broken pieces, and the small hardware you never line-item. Example: $1,000 of material at 20% bills at $1,200. Put your markup rate in the T&M agreement so the client knows it up front. To price the markup itself, the contractor markup calculator helps you set the right number.

A not-to-exceed (NTE) cap is a ceiling on what a T&M job can bill without a signed change order. The client pays for real time and materials, but never more than the cap unless they approve it in writing. This is the single best way to make a homeowner comfortable with T&M. They get the honesty of paying for actual work without the fear of an open checkbook. The template tracks your running total against the cap and warns you when you go over.

Use time and materials when you cannot see the full scope: repairs, water and rot damage, opening up old walls, insurance restoration, and small punch-list work. Use a fixed price when the scope is clear, like a defined kitchen remodel. Many contractors split one job: fixed price for the planned work, T&M for any hidden conditions found during demo. For the planned, fixed-price portion, start with the contractor estimate template. Just agree in writing which parts are T&M before you start.

Your T&M labor rate is a billing rate, not the worker wage. It has to cover the wage, payroll taxes, workers comp, insurance, overhead, and profit. A carpenter you pay $35/hour might bill at $75 to $95/hour once you load in burden and overhead. Do not bill your raw wage or you will lose money on every hour. The burdened labor rate calculator shows your true cost per hour, and the contractor hourly rate calculator helps you set the rate you charge.

Invoice weekly or bi-weekly, not all at once at the end. Frequent, itemized invoices keep the client current on the running total and stop end-of-job sticker shock. Send a short progress note with each invoice so the client knows what the hours bought. On a T&M job, billing often and clearly is what prevents disputes. A big surprise invoice at the end is how T&M jobs go sideways.

A standard fixed-price invoice bills agreed amounts for defined scope, often at milestones. A T&M invoice bills actual hours and actual material cost with a markup, so the total depends on what the work took. If your scope is locked, use the standard contractor invoice template. If you are billing open or unknown scope, use this T&M template. The T&M version separates labor and materials and shows the markup, which a fixed-price invoice does not.

Yes. A T&M agreement is a valid contract as long as it states the labor rates, the material markup, how hours and materials are documented, and any not-to-exceed cap. Get it signed before work starts, just like any contract. Keep timesheets and material receipts so you can back up every line if the client questions an invoice. A signed agreement plus clean documentation is what protects you on a T&M job. Never run T&M on a handshake.

If the work is pure T&M with no cap, extra work just shows up as more hours and materials on the next invoice. But if you have a not-to-exceed cap, going past it requires a signed change order first. Always document scope changes in writing even on T&M, so there is a clear record of what was approved and when. This keeps the paper trail clean and the client informed.