How Do You Bill Time-and-Materials Work?

By Wyatt Cooper · Published October 22, 2026 · 7 min read

Key takeaways

Time-and-materials (T&M) work is paid on actual hours, equipment and materials plus agreed markups, used when the scope is too uncertain to price in advance.
Get written direction to proceed on T&M before you start, and get a ticket signed by the GC's superintendent at the end of every day the work runs.
List each worker's name, classification and hours, each piece of equipment's make, model and working or standby hours, and each material with its invoice.
In the worked example, one day's signed ticket comes to $3,707.45: $2,080.00 of labor, $667.87 of materials and $476.00 of equipment, each with a 15% markup.

To bill time-and-materials work, get written direction to proceed on a T&M basis first, then fill out a ticket every day the work runs: each worker's name, classification and hours, equipment with its working and standby hours, and materials with quantities and invoices. Have the GC's superintendent sign it that day. Price the signed tickets at your contract's rates, add the allowed markup once per group, and submit them with a change order request.

When work goes on T&M

T&M (also called extra work, force account on public jobs, or cost-plus change work) pays the actual cost of labor, equipment and materials plus a markup. It is used when nobody can price the work before it starts: an unknown condition behind a wall, contaminated soil, a repair whose extent shows only as you open it up. If the work can be priced first, a lump-sum change order request is usually better for both sides.

Public agencies use the same method and say plainly when. The Federal Highway Administration describes contractor force account as a way to pay the contractor for time and material, the actual cost of labor, equipment and materials furnished, when the parties cannot negotiate the cost in advance (FHWA, Contractor Force Account). Caltrans' training puts "Get a CO signed!" first on its force-account list (Caltrans payment module).

1GCDirects the work in writing, on a T&M basis, with a not-to-exceed if possible
2SubcontractorFills out a ticket each day: labor, equipment, materials
3GC superintendentChecks the hours and signs the ticket that day
4SubcontractorPrices the signed tickets and sends them with a change order request
5GCIssues the change order; the sub bills it on its pay application

How T&M work gets paid on a typical commercial job.

What goes on a daily T&M ticket

A ticket is a record of one day, signed by someone who saw the work. FHWA's description of the agency's tracking sheet is a good checklist: the names of workers, the type of work each performed and the actual hours they worked, and the make, model and size of equipment, and the materials used (FHWA). Caltrans' local-assistance training tells agency staff to agree on hours with the contractor daily and to sign tentative agreements (Caltrans). Do the same from your side.

The parts of a daily T&M ticket
Part	What to write	Why the GC needs it
Header	Project, date, ticket number, the direction or RFI it is under	Ties the ticket to authorized work
Work done	A sentence on what was done and where	Separates T&M work from base scope done the same day
Labor	Each worker's name, classification and straight and overtime hours	Rates are set by classification
Equipment	Make, model and size; working hours and standby hours	Working and standby are paid at different rates
Materials	Item, quantity, unit and the supplier invoice or delivery ticket	Materials are paid at invoice cost
Signatures	Your foreman and the GC's superintendent, that day	A ticket signed weeks later is an argument

Leave prices off the field copy if your GC prefers; the superintendent signs for quantities and hours, and the office prices them. Never let a disagreement wait: if the superintendent disputes an hour, write both numbers on the ticket and have both sign.

Price the tickets at the contract's rates

Labor is hours times the rate your subcontract sets for each classification, usually the burdened rate (wage plus payroll taxes, insurance and fringes). Equipment is hours times the agreed rental or rate-sheet rate, with standby lower than working time. Materials are invoice cost plus tax and delivery. Then add the markup the contract allows on each group. Caltrans' force-account rules show how fixed these can be: 35% on labor after its labor surcharge, 15% on equipment rental, 15% on materials, and 10% on subcontracted work (Caltrans). Your subcontract may differ; use its numbers.

A worked example: one day of T&M trenching

The job and companies are fictional. A site utility sub, "Ridgeback Site Works", hits an abandoned concrete duct bank while trenching for a water line on the "Pell Street Clinic". The GC directs removal on T&M the same morning. The fictional subcontract's rate sheet sets a foreman at $92.00 an hour and a laborer at $84.00, a mini excavator at $68.00 an hour working and $34.00 on standby, and a 15% markup on labor, materials and equipment. Sales tax on materials is 8%.

Ridgeback's ticket 014, priced (fictional; to the cent)
Line	Basis	Amount
Labor	Foreman 8 h × $92.00 = $736.00; 2 laborers 16 h × $84.00 = $1,344.00	$2,080.00
Labor markup	15% × $2,080.00	$312.00
Materials	Flowable fill and pipe repair coupling $618.40 + 8% tax ($49.472 → $49.47)	$667.87
Materials markup	15% × $667.87 = $100.1805	$100.18
Equipment	Mini excavator 6 h working × $68.00 = $408.00; 2 h standby × $34.00 = $68.00	$476.00
Equipment markup	15% × $476.00	$71.40
Ticket total	$2,392.00 + $768.05 + $547.40	$3,707.45

T&M ticket 014 — Remove abandoned duct bank, water line trench

Project: Pell Street Clinic (fictional)
Direction: GC's written direction 22, T&M, not to exceed $12,000.00
Work done: Broke out and removed 18 ft of abandoned duct bank at station 2+40; backfilled with flowable fill
Labor: J. Ortiz, foreman, 8 h; R. Kim and D. Shaw, laborers, 8 h each
Equipment: Mini excavator, 5-ton class: 6 h working, 2 h standby waiting for the utility locate
Materials: 4 cy flowable fill (delivery ticket 88213); one 8 in repair coupling (invoice 5521)
Signed: Ridgeback foreman and the GC's superintendent, the same day

The daily ticket as the GC's superintendent signs it, on the fictional job. Every name, number and date is made up.

When the work ends, Ridgeback totals all its signed tickets under direction 22, attaches them and the invoices, and sends one change order request for the total. The GC checks it against its own copies, issues the change, and Ridgeback bills it on its next pay application. The change order pricing calculator checks the markup arithmetic.

Why T&M bills get cut

No written direction to proceed on T&M, so the GC treats the work as base scope.
Tickets signed days later, or not at all, by someone who did not see the work.
T&M hours mixed with base-scope hours from the same crew on the same day.
Equipment billed at working rate while it sat on standby, or equipment already on site for base work.
Markup above the subcontract's rate, or markup on a group the contract pays at cost.
Running past a not-to-exceed amount without telling the GC before you reach it.

Faster payment generally comes from the same habits as any change: notice early, paperwork the GC can pass straight to the owner. More of them are in how a subcontractor can get paid faster and the subcontractor's guide.

The bottom line

T&M gets paid when it is authorized in writing before it starts and recorded on a ticket the GC's superintendent signs every day: names, classifications and hours, equipment working and standby, materials with invoices.

Price the signed tickets at your contract's rates, add the allowed markup once per group, and send them together as one change order request.

Join the waitlist as a subcontractor

Sources

Companion Resource: Contractor Force Account (Federal-aid Essentials, May 2016) — Federal Highway Administration, U.S. Department of Transportation. Read October 22, 2026.
Local Assistance Module 8: Payment (January 2026), force account under Standard Specifications 9-1.04 — California Department of Transportation (Caltrans). Read October 22, 2026.
FAR 52.243-4, Changes — Acquisition.gov, U.S. General Services Administration. Read October 22, 2026.

Questions

What is a T&M ticket in construction?

A daily record of changed work done on a time-and-materials basis: the workers, classifications and hours, the equipment with working and standby hours, and the materials used, signed by the GC's superintendent that day.

Who should sign a T&M ticket?

Your foreman and the GC's superintendent or another person the GC names, on the day the work is done. A signature confirms hours and quantities; pricing can be added in the office.

What markup applies to T&M work?

Whatever your subcontract sets, often a different rate for labor, materials and equipment. Public agencies publish theirs; Caltrans, for example, adds 35% to labor after a surcharge and 15% to materials and equipment.

Is standby time billable on a T&M ticket?

Usually, if the GC caused the wait and the contract has a standby rate, which is lower than the working rate. Record standby hours separately on the ticket with the reason.

How do T&M tickets get onto a pay application?

Total the signed tickets for the directed work, send them with a change order request, and once the change order is executed, bill it as its own line on your schedule of values.