Fixed Price or Hourly Rate: Which One Should You Choose?

Written By: Anukriti Parsai

There are mainly two types of payments for any freelancing job: fixed price or hourly payment. For freelancers one of the most crucial questions is how much and how to charge for a job? How does one fix the rate for his/her work? These are questions which are never easy to answer because there are no general rules, which can be listed on this topic.

The reason that this topic is so debatable is because the answer depends on both the freelancer and client. A freelancer always looks for a good payment for his/her work and a client is always looking for high quality work at the most reasonable cost. What a client wants to pay and what a freelancer wants for the job is not always necessary the same but between the two they can work the amount of payment. However the mode of payment will have to be either a fixed price or an hourly rate. So how do you choose? Let us take a look at the pros and cons of both and hopefully it will give you a clear idea of which once you should select.

Hourly Rate Job

An hourly rate job is a job for which you are being paid by the hour.  Depending on your agreement with the client the formula for keeping a track of your hourly work can easily be worked out. Most of the times the client will ask you about how much work you can do in an hour before fixing the hourly rate for the job.

The Good

  • Has a scope for changing payment and time.
  • You will surely get paid for the amount of work you do.
  • You gain more client trust because he/she can easily keep track of your progress.
  • Lower financial risk
  • Changes are adapted easily on both sides because no side feels shortchanged.
  • Changes and extra time can be easily accommodated.
  • Perfect for working in a variable environment

The Bad
  • Hourly rates have a limit.
  • Income is not always constant.
  • It is difficult to predict the workload in advance
  • More chances of miscommunication

There are many things, which you need to consider when applying for hourly jobs. These include things like billing of time that will be required to search the web and time required discussing the project with client and the team etc.

The amount you charge for an hourly job will depend on the skills and expertise required to complete the job. Check the industry rates and calculate your personal factors before deciding an amount.

Fixed price job

A fixed price job is one in which you get paid a fixed amount to do the job. A fixed price job does not take into account the amount of time and energy that you will put in completing the job. There payment of the job is decided upfront and there is a little chance of flexibility. The client will pay you once the job is done in the stipulated time and he is satisfied with your job.
The Good

  • Income is fixed
  • You can ask for a part of payment upfront.
  • The work outline is clearly defined
  • You can use your resources
  • Work on your own time.

The Bad

  • Risk of running a feature creep
  • Risk of losing payment
  • Likely to take financial burnt on yourself.

The biggest risk that a fixed price job runs into is the ‘little extra’ that some clients might want you to do. A little changes and additions can be adjusted in the job but you will have to draw a line if these demands do not stop and become a condition of payment.

The right formula

Some freelancers prefer to work for a fixed price job and some prefer to work for hourly jobs. My advice is to strike a balance between the two. Take the advantage of the good in both and you will never go wrong. When working for fixed price jobs I usually take 40% of upfront payment, which acts as a surety on both sides. When you are in doubt about the profit you can get out of a job then go for hourly payment otherwise opt for fixed price.

Of course the client will have a lot of say in this because it is he/she who is offering the job. But if you have a clear mind about what and how you want to charge for the job you will be able to negotiate better and both parties will benefit.

Various good sites like offer a variety of hourly and fixed price

jobs in various areas for freelancers.

About Anukriti:

Anukriti Parsai Bais is an engineer by profession. She reflects her love for gadgets by writing responses to technical forums and product reviews. She has over three years of experience in freelance writing and loves the freedom of trying out new things that freelancing gives her. You can visit her profile at and contact her at


  1. Thanks for the tips. Very useful!
    I'm a freelance writer, a bit out of it because I took a break to write a book, travel the world, get a divorce...and other things. So here I am, back again, an old dog learning new tricks.
    Your blog is going to get me going...

    1. Thank you Kalpana. Pleased to hear that it helped you.


  2. Hi Anukriti

    I see you have not mentioned your own blog address. I highly recommend that you start a blog of your own.

  3. Hello,

    Yes, it is really helpful. But one new concept which is currently commonly we see, is to advertise your skills and get the work. instead of get hired for specific project, let employer decide and choose you.

    Thanks and Regards,


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