Free time and materials invoice template with a not-to-exceed cap
A time and materials invoice bills what the job actually took: hours by worker class at agreed rates, materials at cost plus a stated markup, and equipment, each line backed by a daily ticket the client signed. It also shows the not-to-exceed cap and how much of it is gone. The sample below bills three days of rot repair around a leaking window at $5,766.36 against a $7,500.00 cap, and both blank files, PDF and CSV, are free.
What goes on a time and materials invoice
| Field | What goes there |
|---|---|
| T&M agreement and rate sheet reference | The date the client signed the T&M agreement and the rate sheet attached to it. Every rate on the invoice should be findable on that sheet. |
| Not-to-exceed amount and amount used | The cap, the total billed so far including this invoice, and what is left. On the sample those three numbers are $7,500.00, $5,766.36 and $1,733.64. |
| Billing period | The dates this invoice covers. T&M bills weekly on most jobs, because a month of unreviewed hours is where disputes come from. |
| Labor by worker class | One line per class, such as lead carpenter, carpenter and laborer, each at its own rate. A single blended hours line hides who was on site and invites the client to argue the whole number. |
| Hours from signed tickets | The hours on each labor line are the sum of the daily tickets for the period, no more. If the tickets say 22 hours for the lead, the invoice says 22. |
| Materials at cost | What you paid suppliers before markup, with receipts or supplier invoices attached. The sample's $1,286.40 is four receipts: a window at $392.00, framing lumber at $318.60, sheathing and flashing at $241.80, and siding and trim at $334.00. |
| Stated markup | The percent from your agreement applied to material cost, on a line by itself. With cost and markup apart, a client can check the receipts and still see that your margin was agreed. |
| Equipment and rentals | Owned equipment at the rate on your sheet and rentals at the rental invoice amount. Give the unit: per hour, per day or per week. |
| Other direct costs | Dump fees, permits and subcontracted work, each at cost with its receipt, and marked up only if the agreement says so. |
| Ticket log | The ticket numbers and dates behind the invoice, with the signed tickets attached. The client's signature on each ticket is your proof the hours were seen when they happened. |
| Total this period and terms | The sum for the period and the day it is due. You are fronting wages and material on T&M work, so short terms are normal and belong in the agreement. |
The line-item table
| Description | T&M tickets | Qty | Rate | Amount |
|---|---|---|---|---|
| Lead carpenter, per hour | 101 to 103 | 22 | $92.00 | $2,024.00 |
| Carpenter, per hour | 101 to 103 | 20 | $74.00 | $1,480.00 |
| Laborer, demo and cleanup, per hour | 101 and 103 | 9 | $48.00 | $432.00 |
| Materials at cost, 4 receipts attached | 101 to 103 | 1 | $1,286.40 | $1,286.40 |
| Markup on materials at 15%, per agreement | 101 to 103 | 1 | $192.96 | $192.96 |
| Scaffold rental, per day | 101 to 103 | 3 | $85.00 | $255.00 |
| Dump fee at cost, receipt attached | 103 | 1 | $96.00 | $96.00 |
How to use this template
- Sign the rate sheet before the work starts. List every worker class with its hourly rate, the markup on materials and subs, equipment rates, and the cap. Rates agreed after the hours are worked are just an argument.
- Write a ticket every day and get it signed. At the end of each day, fill in who worked, how many hours, what materials went in and what equipment ran, then have the client or their rep sign it on site. A ticket signed that day is rarely questioned, and a stack signed three weeks later usually is.
- Build the invoice from the tickets. Add the hours by class across the period's tickets and carry the totals to the invoice. Put the ticket numbers on each line so anyone can trace 22 hours back to three specific days.
- Show cost and markup as two lines. Total the receipts, then apply the agreed percent underneath. On the sample, $1,286.40 of materials at 15 percent adds $192.96.
- Report the cap on every invoice. Print the not-to-exceed amount, the total billed to date and the remainder. When you reach roughly three quarters of the cap, tell the client in writing and ask for an increase before the work passes it.
Get paid faster
Rates should cover more than wages
A T&M hourly rate is not the worker's paycheck. Federal contracting rules define the T&M labor rate as including wages, overhead, general and administrative expenses, and profit, and your rate sheet should be built the same way.
Know markup from margin
A 15 percent markup on cost is a 13 percent margin on the price, because $15 on a $115 sale is 13 percent. Quote the one your agreement names and do the math the same way on every invoice.
Past the cap, the risk is yours
Under a not-to-exceed, hours past the cap are unpaid unless the client agreed to raise it. Federal T&M contracts work the same way: they carry a ceiling price that the contractor exceeds at its own risk.
Check state rules on residential T&M
Some states regulate home improvement contracts tightly. California's contractor board says a home improvement contract must include the agreed price and that the price changes only through a written change order. If you plan open-ended T&M on a homeowner's house, ask a construction attorney how to write it in your state, since this page is general information.
The PDF and CSV blanks keep the T&M tickets column, so every labor, material and equipment line can point to the signed ticket behind it.
Frequently asked questions
What is a time and materials invoice?
An invoice that bills actual labor hours at agreed hourly rates plus actual material costs with an agreed markup, in place of a fixed price. It is used when the scope cannot be known in advance: repairs behind a wall, troubleshooting, and extra work ordered mid-job. A good one attaches the daily tickets and receipts that prove each line.
What markup is normal on materials in T&M work?
It is whatever the signed agreement says, and 10 to 20 percent on material cost is a common range in the trades. The markup pays for buying, hauling, storing and warranting the material. State it as a percent of cost, show it under the receipts total, and apply the same percent to every invoice on the job.
What does not-to-exceed mean on a T&M invoice?
It is a cap on the total the client can be billed without approving more. You bill actual time and materials up to that number, and you stop or get a written increase before you pass it. Each invoice should show the cap, the amount used and the amount left, so the client is never surprised by how close the job is running.
Does the client have to sign T&M tickets?
No single rule requires it everywhere, but a signature is what turns your hours from a claim into a record. A daily ticket lists the date, the workers and their classes, hours, materials used and equipment, and the client or their site rep signs it that day. When a GC orders extra work on T&M, the subcontract often says unsigned tickets will not be paid, so read that clause.
Can Staxen send my T&M invoices?
Yes, with one limit: Staxen does not keep timesheets, so the hours and receipts come from your own signed tickets. Ivy the Invoicer turns those lines into an invoice, sends it with card and ACH payment through Stripe, escalates the reminders if it goes overdue, and syncs both ways with QuickBooks Online. You pay $59 per month per AI employee, or $149 per month for all three, and the app is free for the first 7 days.