Charge hourly when the scope is uncertain, and a fixed fee when the work is well defined. Many service businesses mix the two: a fixed fee for defined phases, capped hourly for the rest, and a retainer for ongoing work.
How you price shapes how you're paid, how clients see your work, and how much you earn from getting faster at it. Here's how the models compare.
Hourly vs fixed fee compared
| Hourly | Fixed fee | |
|---|---|---|
| Client knows the cost upfront | No | Yes |
| Risk of scope creep | Low for you, the client pays for extra time | Yours, unless changes are priced separately |
| Reward for efficiency | Lower, faster work earns less | Higher, faster work raises your margin |
| Admin | Time tracking and detailed invoices | Clear scope and change requests |
| Best for | Advisory, support, unclear scope | Defined deliverables and packages |
Hybrid pricing models
- Capped hourly: bill by the hour up to an agreed maximum.
- Phased fixed fees: a fixed fee per project phase, priced as each one is scoped.
- Fixed fee plus hourly changes: a fixed price for the agreed scope, with extra requests billed hourly.
- Retainer: a monthly fee for ongoing work, with a clear rule for overages. See how to set up a client retainer.
- Packages: two or three fixed-price options the client chooses from.
How to decide
- How well can you define the work? The clearer the scope, the better a fixed fee fits.
- How well do you know your own speed? If you've tracked similar projects, you can price them confidently.
- What does the client value? Budget certainty favors fixed fees. Flexibility favors hourly.
- Can you absorb an overrun? If not, choose hourly, capped hourly, or phases.
How Clientary helps
Clientary supports every model. Run projects at a fixed hourly rate, by each person's rate, or as a flat fee, and split them into phases with their own fee types: fixed, capped hourly, hourly, or non-billable. Time tracking works on every project, so you can see whether a fixed fee paid off, and tracked time becomes a detailed invoice in a few clicks.
