Hourly vs Fixed Price: Which Should You Charge?
Charging by the hour and quoting a fixed price put the risk in different places. Hourly work protects you when scope is murky; a fixed price rewards you when you finish early — and punishes you when you don't.
Hourly
You bill for the time you spend, at a set rate.
fee = hours × hourly rateFixed price
You quote one number for the whole job, agreed up front.
fee = estimated hours × rate + bufferSide by side
| Hourly | Fixed price | |
|---|---|---|
| What the client sees | An open-ended hourly total | One number to approve |
| Who carries the risk | The client — overruns cost them | You — overruns cost you |
| Rewards efficiency? | No — finishing fast earns less | Yes — finishing fast earns more |
| Best when scope is | Unclear or changing | Well defined |
| The invoice looks like | Timesheet × rate | A single agreed amount |
Worked example
Inputs: 40 hours at 2,000 per hour
Hourly: 80,000
Fixed quote: 95,000 (includes a rework buffer)
The fixed quote is higher because it prices the risk of overruns. The client buys certainty; you get covered if the job runs long.
When to use Hourly
Charge hourly when you can't scope the work — discovery, support, or open-ended development — so unpredictable scope doesn't land on your balance sheet.
When to use Fixed price
Quote a fixed price when the work is well defined and you've done it before. You capture the upside of finishing early, and the client gets a number they can approve.
The short answer
Quote fixed prices for defined projects and fall back to hourly when scope is genuinely unknown. Build every fixed quote from a realistic hourly estimate plus a buffer — never a guess.
Run the numbers
Frequently asked questions
Quick answers before you start.
Which earns more, hourly or fixed price?
Fixed price, when you estimate well. It pays you for the outcome rather than the clock, so speed and efficiency raise your effective rate instead of lowering your fee.
How do I set a fixed price without guessing?
Estimate the hours honestly, multiply by your hourly rate, then add a buffer — often 20–30% — for revisions, communication, and unknowns. The buffer is not padding; it's the price of taking on the risk.
What if the scope grows on a fixed price?
Define what's included in writing, and treat anything beyond it as a change order with its own price. A fixed price with no scope statement is just an hourly job waiting to become a loss.