Hourly project cost

What it's for

Estimated hours times hourly rate: it's the simplest quote there is, and it's the one written in a hurry before answering an email. Here the sum is done and the line underneath recalls where it comes from, so when the client asks «why so much?» the answer is already written: this many hours, at this much an hour.

The hours to put in are the real ones

The number nearly everyone gets wrong isn't the rate, it's the hours. People estimate the hours of the work «if all goes well», and then leave out the things that are always there: reading the material, the emails, the alignment call, two rounds of revisions, exporting in the formats needed, delivery. A practical rule that holds: estimate the hours of the pure work and add 20 to 30 per cent, or state how many revisions are included.

It works the other way too, and it's why quotes sometimes lose: if you're doing something you've already done ten times, the hours are fewer than you expect, and asking for more than you need shows.

An hourly rate isn't an hourly wage

A freelancer doesn't bill every hour they work: part of the time goes on quotes, admin, finding clients and learning, and billable hours are generally between 50 and 70 per cent of the hours worked. On top of that, the rate has to cover tax, contributions, holidays, sick days, equipment and the empty stretches. The consequence surprises everyone starting out: to take home what an employee earning twenty an hour takes home, the rate to charge is a great deal higher. The sum backwards is done by Freelance hourly rate.

By the hour or fixed price?

An hourly quote charges for time; a fixed-price one charges for the result. The real difference is who carries the risk: by the hour, if the job drags on the client pays for it; at a fixed price, you do. A fixed price is still built from the hours, with a margin for the unexpected, and it's nearly always preferred by the client because it gives them a certain number. If you go fixed, put in writing what's included: that's where it's decided whether you made anything.

Nearby tools

To work out which rate you need starting from what you want to take home there is Freelance hourly rate. To add up the hours noted down over the week there is Add hours and minutes, and to see whether a job covers its costs Break-even point.