How to use the T&M calculator
- Add a row for each trade or worker with the number of workers, hours each and the hourly rate. Use a separate row for overtime.
- List the materials used with quantity and cost, and enter any equipment or rentals.
- Set the markups agreed in your contract for labor, materials and equipment, and sales tax if it applies.
- Open “Turn this into a printable T&M ticket”, describe the work performed and print it for the customer to sign — or save it as a PDF.
The formula
Labor = Σ (workers × hours × rate) × (1 + labor markup) Materials = Σ (qty × cost) × (1 + material markup) Equipment = rental cost × (1 + equipment markup) Total = labor + materials + equipment + sales tax on materials
Worked example
Two carpenters at $68/h and a laborer at $42/h each work 6 hours replacing water-damaged drywall. They use 3 sheets of drywall at $14.50, a bucket of compound at $21 and a box of screws at $9.75, with a 15% material markup:
- Labor = (2 × 6 × $68) + (1 × 6 × $42) = $1,068.00
- Materials = $74.25 × 1.15, with each unit price rounded to the cent = $85.40
- Total to bill = $1,153.40, including $11.15 of markup on materials
What goes on a T&M ticket
- Your business details, the customer, project and job site, the ticket number and the date of the work.
- A short description of the work performed that day.
- Each trade with hours and rate, each material with quantity and price, and equipment.
- Totals for labor, materials, equipment, tax and the grand total.
- Signature lines for the customer representative and your foreman.
Tips for getting T&M work paid
- Fill in a ticket every day. Memories fade fast; a ticket signed the same day is hard to dispute.
- Get the right signature. Make sure the person signing is authorized by the customer to approve extra work.
- Agree rates up front. Put labor rates, overtime rules, equipment rates and markups in the contract or change order before any T&M work starts.
- Keep receipts. Attach supplier receipts or invoices for materials, especially when you bill cost plus markup.
- Watch for a ceiling. Many T&M agreements include a not-to-exceed amount. Tell the customer early if you are getting close.
- Turn tickets into an invoice. At the end of the period, total the signed tickets and invoice them together, quoting each ticket number.
T&M or fixed price?
A fixed price gives the customer certainty and rewards you for working efficiently, but it is risky when the scope is unclear. T&M moves that risk to the customer, which is why it is common for repairs, hidden-damage work and emergencies, and why customers expect detailed, signed records. Government contracts also use T&M — in the US it is defined in the Federal Acquisition Regulation, usually with a ceiling price. When the extra work can be defined, a fixed-price change order is usually the better choice.