Freelancing • Entrepreneurship • Remote Work • Productivity


Should I Charge by the Hour or by the Project?

Monopoly board

What are the options to bill your clients? Which one is better? What’s the difference, anyway? And are there any other alternatives? Let’s take a look.

First, we should lay down some ground rules, aka what does it even mean getting paid by the hour or by the project?

Getting paid by the hour

Someones hand holding cash

This one is easy. You spend 50 hours building a website; your invoice will show 50 hours * your hourly rate. Plus any extra maintenance fees, of course.

This option is a perfect fit for:

  • Single client continuous work,
  • uncertain project budget,
  • predictable cash flow,
  • unpredictable or new clients.

It directly projects your skillset and how confident you are in your abilities.

On average, charging per hour favors freelancers over customers. The risk here is that you are directly selling your time to someone. This means there is little motivation for getting more effective as you could actually lose money if you run out of work or switch context too often.

Getting paid by the project

Someones hand with pen and paper with cahrts on it

This one is also easy but a little tricky at the same time. What I mean is, if you want to get paid for the whole project, you have to create some kind of pricing process first.

Most people will come up with a guesstimate of how many hours they will need to complete the project, then multiply by their desired hourly rate. Optionally add some safety net on top of that.

This is certainly a way of doing things.

However, by finishing a project, you deliver value to your client. It is this value you should consider during your pricing process.

  • How much time will my client save?
  • How much extra money will they make?
  • How many unnecessary expenses will this project prevent?

These are the things to incorporate into your pricing as well.

Per-project pricing is also great for beginners who are still unsure about their hourly rate or have no portfolio to back up their knowledge and experience.

Which one is better?

Two people holding small and big pineapple

You didn’t really think there will be a definitive statement in here, did you?

For one-time delivery, customers often prefer a flat fee. It gives them a better overview of their cash flow. Unlike continuous work, for which they would prefer to pay you by the hour.

In the end, it’s mostly up to you. How do you want to position yourself. What kind of client type do you want to attract.

Last but not least, do market research and other appropriate leg work.

How much is your competition charging? How much time does a typical project take in your field? Which one is more common, per-hour billing, or per-project billing? Are down payments a thing? The list goes on.

How do you bill your clients? Which software are you using to track time, manage tasks, and create invoices? Tell us in the comments.

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