Top of the FAQ list for creative entrepreneurs and freelancers: should I charge for my work by the hour or set a fixed price per project? You need to pick a pricing method that is sustainable and profitable for you, and yet appealing to clients, so which of those options ticks both options? Charging an hourly rate ensures you are properly compensated for all your efforts, but charging a flat rate offers more certainty. The truth is, there is no one size fits all answer to how to price your services as a freelancer, but we've analysed both pricing options to weigh up the pros and cons. This article will provide you with the facts to help you weigh up which pricing method is right for you and your business.

Option 1: charging per hour

An hourly rate is the price that you charge per hour for your time spent on a project. Charging by the hour requires you to thoroughly track the hours you've spent working for the client and total up the time spent when the project is complete.

Advantages of charging per hour

Say goodbye to unpaid overtime

‍Charging per hour means you are guaranteed to be compensated for all the time and effort you invest in a project. Revisions or unexpected problems can result in you spending longer on a project than originally expected—a flat rate cannot be amended to cover the costs, but if you are billing per hour you can rest assured your efforts are being paid for.

Ideal for long-term clients

‍Some freelance projects are more flexible than others, with no fixed scope or timeline for completion. For this kind of work, always charge by the hour. This allows you and your client more flexibility and ensures you will not be caught short by any revisions and add-ons to the original brief.

Disadvantages of charging per hour

Trickier to navigate

If charging an hourly rate, you'll need to be vigilant with tracking your hours and keeping a record to present to your clients. Be aware that some clients might be cautious of working with creatives who charge per hour for fear of being ripped off.

No bottom limit

‍When charging a flat rate, you have. guaranteed income. When charging per hour, your income is more likely to fluctuate. It is also wise to agree with your client a bi-weekly schedule for payment, rather than waiting until the very end of a project to receive your payment.

Option 2: charging per project

Charging per project, commonly known as charging a flat rate, means you will quote your client a set price for the completion of the project, regardless of how much time it takes you to complete it.

Advantages of charging per project

Capitalise on your productivity

‍If you're a fast worker, charging a flat rate could be a more rewarding way to charge for your services. Flat rates reward above-average productivity—if you’re quick and finish projects fast, the time you save means more profit for you. Whereas if you charged per hour, you could be cutting yourself out of potential pay.

Payment security

‍If charging a flat rate, you can be sure of how much money will be coming into your business and budget accordingly. Clients often prefer the certainty of per-project pricing too.

Disadvantages of charging per project

Difficult for newbies

‍If you're new to business, it can be hard to determine what a suitable rate is for a project because you are not yet sure of how long it will take to complete, how many materials you will need etc. Clients are often more receptive to flat rate fees from established freelancers because they can be sure they will receive quality service.

Overworked, underpaid

If you do miscalculate the time project will take you, you'll end up working overtime without financial compensation. If you are unsure of the scope of work a project involves, charging by the hour might be a safer option for you.

Before you decide...

Both charging by the hour and charging a flat fee have their pros and cons. It all comes down to your level of experience and the details of the particular project. Before picking one pricing method over the other, always consider your options and thoroughly review and plan for the scope of your work.