Key takeaways
- Flat-rate (fixed price): the customer knows the total; you keep the upside if you're fast. Best when scope is clear.
- Time & materials: you bill hours plus materials. Best when scope is uncertain.
- Most customers prefer a flat price — so quote flat, but build it from your hourly rate behind the scenes.
- The pros' move: flat-rate for the known work, an allowance or T&M for the unknown parts.
Short version: quote flat-rate when you can predict the work, and use time & materials when you genuinely can't. Most customers prefer a fixed price and it rewards you for being efficient — so flat-rate should be your default, with T&M saved for the truly unknown parts.
What's the difference?
- Flat-rate is one fixed price for the whole job. The customer knows exactly what they'll pay; you absorb the risk if it takes longer — and keep the reward if it goes fast.
- Time & materials (T&M) bills your actual hours plus materials (usually with a markup). You're covered if the job balloons, but the customer doesn't know the final number up front.
When flat-rate wins
For most jobs with a clear scope, flat-rate is the better call:
- Customers prefer a known number — it's easier to say yes to.
- It rewards efficiency: get faster and your effective rate goes up.
- It looks more professional than an open-ended meter running.
Just make sure you build the flat price from your real costs — labor, overhead, materials, and margin — not a gut guess.
When time & materials makes sense
Use T&M (or be honest that part of the job is T&M) when you truly can't see the scope:
- "Open up the wall and see what's behind it" work
- Demo and discovery before the real job
- Repairs where the cause is unknown
Quoting a hard flat price on a mystery is how you eat the difference.
The hybrid most pros use
The sweet spot: flat-rate for the known work, plus an allowance or T&M line for the unknowns. For example, a flat price to remodel the bathroom with a $1,500 *allowance* for tile the customer hasn't picked yet. They get a real number, and you're not on the hook for a choice they haven't made.
This is exactly what JobPricer does for you: enter your overhead once and every quote shows labor, materials, overhead, and your real profit before you hit send.
Try it free →Frequently asked questions
Is flat-rate or T&M better for contractors?
Flat-rate is the better default — customers prefer it and it rewards efficiency. Reserve time & materials for genuinely unpredictable work, or use a hybrid with allowances.
How do I price a flat-rate job?
Build it up from your
hourly rate plus overhead, materials with markup, and a profit margin — then present it as one number. Never set a flat price by guessing.
What is an allowance in a quote?
A budgeted line for something the customer hasn't decided yet (tile, fixtures, finishes). It keeps the quote a real number while leaving room for their final choice.
CWritten by Craig, founder of JobPricer
I ran a contracting business and finished 500+ jobs before I built JobPricer. Everything here is what I wish someone had told me when I started quoting.