Definition: Time and materials (T&M) is a pricing model in which the client pays for the actual time worked, at agreed hourly, daily or monthly rates, plus any materials or expenses, rather than a fixed price for a defined scope.
The parties agree rates per role and how time is tracked and approved. Work proceeds against a backlog the client can reprioritize, and invoices reflect the effort actually spent. Many agreements add a budget cap, regular reporting or a not-to-exceed amount to keep spend predictable. Scope and rates are often written into a statement of work.
Fixed price suits work with clear, stable requirements: the provider carries the estimating risk, but changes require formal change orders. T&M suits evolving work such as new products, AI systems and modernization, where requirements are learned along the way. The client gains flexibility and carries more budget risk.
Good T&M engagements rely on visible progress: sprint demos, burn reports and clear priorities. Monthly per-engineer rates, common with staff augmentation, make budgeting simpler.
Ryz typical pricing is $7,000 to $15,000 per engineer per month, with quotes scoped per team. See staff augmentation rates.
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