Fixed-price contracts assume you know exactly what to build. Most growing products don't. A Codersarts time and material (T&M) contract lets you build software the way products actually evolve: you change priorities every sprint, start without a full specification, and pay only for the hours worked at agreed rates. Monthly budget caps, approved sprint estimates and weekly timesheets keep spending predictable, so you get flexibility without losing control. The result is faster releases and features your users actually need, with no change-request friction.
What Is a Time and Material (T&M) Contract?
A time and material contract is an agreement where you pay for the actual time spent on your project at agreed hourly or daily rates, plus the cost of any materials or third-party services used. In software development, "materials" usually means tools, licences, cloud resources or paid APIs.
T&M stands for time and material. When a project runs on a T&M basis, scope can change as you learn, and you're billed for the work actually done rather than a price fixed in advance.
Codersarts runs time and material software development for product teams, startups and enterprises worldwide. You get sprint-based delivery, full timesheet transparency and budget controls that keep a flexible contract predictable.
When the Time and Material Model Fits
The time and material model works best when requirements can't be fully defined upfront:
Product iteration after launch: features driven by user feedback and analytics
Evolving roadmaps: priorities that change with market or investor input
Legacy modernisation: unknowns that only appear once work starts
AI and R&D work: experimentation, model tuning and evaluation cycles
Complex integrations: third-party systems with limited documentation
Ongoing improvements: continuous enhancements to an existing product
If your scope is clear and stable, a Fixed-Price Project is usually the better choice.
How T&M Billing Works
1. Agreed Rates
Hourly or daily rates are agreed upfront for each role: developers, designers, QA, DevOps, AI/ML engineers and project management.
2. Sprint Planning
Work is planned in 1–2 week sprints. Each sprint starts with priorities and an estimate that you approve.
3. Time Tracking
Every hour is logged against tasks in a shared time-tracking system.
4. Weekly Timesheets
You receive weekly timesheets by person and task, with a burn report against the monthly budget.
5. Monthly Invoicing
You're invoiced monthly for hours worked plus any pre-approved materials (cloud, licences, APIs), with timesheets attached.
Time and Material vs Fixed Price
Time and Material | Fixed Price | |
Scope | Flexible, changes any sprint | Locked at contract signing |
Pricing | Hours worked × agreed rates | One agreed price |
Who carries estimate risk | Client (with budget caps) | Vendor |
Change requests | Not needed; reprioritise the backlog | Formal change request and re-quote |
Start time | Fast; no full specification needed | Slower; detailed scope required first |
Budget predictability | Controlled through caps and sprint estimates | High, if scope doesn't change |
Best for | Evolving products, R&D, iteration | Well-defined MVPs, migrations, fixed deliverables |
Can You Combine T&M and Fixed Price?
Yes, and many clients do. A common approach is to fix the price of a clearly defined MVP, then continue on a time and material basis for iterations after launch. Another is to run discovery on a fixed price, then build on T&M once the backlog is prioritised.
Advantages of a Time and Material Contract
Flexibility: change priorities every sprint without renegotiating the contract
Faster start: begin with an initial backlog instead of a full specification
Pay for work done: no risk buffer padded into the price
Better product fit: build what users need, not what was guessed months earlier
Full visibility: see exactly where every hour goes
Direct control: you set priorities and approve every sprint
Time and Material Contract Risks, and How We Control Them
A time and material contract shifts estimate risk to the client. Our controls make that risk small and visible:
Risk | Codersarts control |
Budget overrun | Monthly budget cap; work pauses for your approval before it is exceeded |
Scope creep | Sprint-level estimates approved before work starts |
Low productivity | Weekly timesheets, sprint demos and velocity reporting |
Hidden costs | Materials and third-party costs pre-approved in writing |
Surprise spend | Early warnings when estimates or scope start to grow |
Lock-in | Monthly terms with a clear notice period |
What a Time and Material Contract Includes
Every Codersarts T&M agreement covers:
Roles and rates: hourly or daily rate for each role and seniority level
Monthly budget cap: maximum monthly spend without written approval
Time tracking and reporting: timesheet format, frequency and access
Materials clause: how cloud, licences and third-party costs are approved and billed
Invoicing and payment terms: monthly invoicing with attached timesheets
Change of team size: notice required to scale up or down
IP ownership: all code and deliverables assigned to you
Confidentiality: NDA terms
Termination: notice period and handover obligations
Time and Material Contract Example
Here's a typical example for software development. A startup engages two full-stack developers and one part-time QA engineer on a time and material basis. Rates are agreed per role, with a monthly budget cap. Work runs in two-week sprints; the product owner approves each sprint's estimate, receives weekly timesheets and pays a monthly invoice for actual hours. When priorities change after user testing, the backlog is reordered at the next sprint planning, with no contract change needed.
Software Developer Cost per Hour
On a T&M contract, your cost depends on each engineer's role, seniority and location. Offshore development teams in India typically cost significantly less per hour than equivalent developers in the US, UK, Western Europe or Australia, while offering the same modern stacks and AI skills.
We share a detailed rate card by role and seniority during your scoping call, with a monthly cost estimate based on your team shape.
Typical T&M Projects
Post-launch product iteration and new features
SaaS platform scaling and performance work
Legacy modernisation and refactoring
AI features that need experimentation and tuning
Integrations with poorly documented third-party systems
Continuous improvement of web and mobile apps
Team Roles Available
Full-stack, frontend, backend, mobile, AI/ML, data, DevOps, QA, UI/UX and project management across Python, JavaScript/TypeScript, React, Node.js, Java, .NET, Flutter, React Native and the major cloud platforms.
What We Need From You
A product owner to set sprint priorities
Availability for sprint planning and demos
Timely feedback on completed work
A monthly budget cap
Why Codersarts
500+ apps shipped since 2018
Transparent timesheets and full repository access
Budget caps and early warnings that prevent surprises
Flexible team scaling month by month
Global delivery with async-first communication across time zones
What Happens Next
Paid Discovery: build the initial backlog before sprint one
Fixed-Price Project: for clearly defined phases
Dedicated Team: once the roadmap stabilises and you want fixed monthly capacity
Frequently Asked Questions
What does T&M mean?
T&M means time and material: you pay for the actual time spent on a project at agreed rates, plus any pre-approved materials or third-party costs.
What is a T&M basis?
Working on a T&M basis means billing is based on hours worked rather than a fixed project price.
Is time and material more expensive than fixed price?
Often not. Fixed prices include a risk buffer for unknowns. With time and material, you pay only for work actually done.
How do I control the budget on a T&M contract?
Through a monthly budget cap, approved sprint estimates, weekly timesheets and burn reports.
What's included in time and materials billing?
Hours worked by each role at the agreed rate, plus any materials you approved, such as cloud resources, licences or paid APIs, invoiced monthly with timesheets.
Can I switch from T&M to fixed price later?
Yes. Clearly defined phases can move to fixed price at any point.
Is there a minimum commitment?
We recommend at least one month to establish a working rhythm.
Who owns the code?
You do. All IP is assigned to you.