Hourly vs fixed price — what your hours are really worth
A fixed price can pay better than your hourly rate, or much worse. The only way to know is to keep counting the hours.
A fixed price feels safer than billing by the hour: the client knows the number, you know the number, done. But the number only tells you what the project pays. What it’s worth depends on how long it takes.
Divide the price by the hours it took, and you get the rate you actually worked for. Take a 3.500 € project:
| Hours it took |
Your real rate |
| 15 |
233 € |
| 22 |
159 € |
| 30 |
117 € |
| 40 |
88 € |
| 50 |
70 € |
Same invoice, very different month. Billed by the hour, every extra hour adds to what you earn. On a fixed price, every extra hour takes from it — and nothing tells you unless you count.
A fixed price is an hourly rate in disguise, so start from hours:
- Estimate the hours, calls and revisions included — they’re work too.
- Multiply by your rate. 40 hours at 75 € is 3.000 €.
- Add a margin for what nobody has mentioned yet: a round of changes, a slow week of feedback. Ten to twenty per cent is common — quote 3.500 €.
- Write the estimate down. 3.500 € over 40 hours is a planned rate of 88 € an hour. That’s the number to watch.
Every quote gets better than the last — as long as you tracked the hours on the last one. Without them, the next quote is a guess again.
On a fixed price, the rate so far always starts high. At 22 hours in, 3.500 € is 159 € an hour, and it only falls from there. What matters is how fast — whether the work will be done inside the 40 hours you planned.
That’s why it’s worth watching while it happens. Halfway through the hours with a third of the work done, there’s still time to talk about scope. After the last invoice, there isn’t.
A retainer pays per period — a week or a month — not per hour. It usually includes a number of hours, and the same question applies: how many did the period really take?
Count the hours in each period against what’s included. Under, and the retainer pays better than your rate. Over, and the extra hours are worth charging for — at your hourly rate, on the next invoice, not three months later when nobody remembers them. Monotime counts them per period and shows what the hours over are worth when the period is due to invoice.
- Hourly when the scope isn’t clear yet, or keeps changing — discovery, support, can you just…
- Fixed price when the scope is clear and you’ve done something like it before, so your hours can tell you how long it takes.
- Retainer for ongoing work at a steady pace — with an agreed number of hours, so ongoing doesn’t mean unlimited.
Whichever you pick, keep tracking the hours. Billed by the hour, they’re the invoice. On a fixed price or a retainer, they’re the only way to know what the work really paid — and the best start for the next quote.