Should You Charge by the Hour?

“What`s your hourly rate?”

You may be scared of this common question from most clients and decide to charge fixed rates on the project.

This is not the best reason to either choose to charge for projects by the hour or on a fixed cost.

Here are instances when you should charge hourly and when you are better off charging fixed amount on projects.

Instances When You Should Charge by the Hour

charge by the hour

When a client hires you to stand in for someone

Sometimes clients may need to hire you to help run their projects for a few hours each week because their employees are temporarily unavailable. In this case, it is unrealistic to charge a fixed amount.

Hourly charge in such a situation is the best option. You are also unlikely to run into too much pushback on your rates. Remember the client needs your help seriously hence the perceived value of your work is high.

When you enter unprecedented territory

If you are getting work from a new client, you are obliviously entering a new territory. Learning curves are typical encounters as you get to know the client`s products and services, industry and work methods.  In such situations, coming up with project rate is not easy.

To be on the safe side, you should charge by the hour, especially for the initial project. This ensures that you don’t under-price yourself. This will also mollify the outcomes of project scope creep. A scope creep can turn a 4-hour project to a 12-hour project. In such instances, you are protected.

When the nature of the project is not clear

Sometimes the client may not define the project clearly. My friend, in such situations you need to be extra careful. Here you have several options.

You can charge fixed amount for the project but be very specific about its scope. For example, if your client needs a landing page, consider using your freelance contract clearly define what will be included.

“The project includes delivery of the first draft and three rounds of edits. Any additional work or revisions will call for extra charges of $21 per hour.”

It may also work well when you choose to charge by the hour. This billing method will guarantee your payments as the project develops and changes with time. Here, you have no fear of being underpaid if the project working time increases by 4 hours daily.

You may consider charging a fixed amount for the project but with exceptions. Use your freelance contract to state clearly the flat rate fee as well as exceptions. For example, you may say, “the mentioned priced is based on an expected timeframe of 28 hours to complete the project. Should the scope change, the client will have to meet extra charges of $27 per hour.”

Now that you know when to charge by the hour, how much should your charge per hour? Well, there’s no definite value for that. You can charge $20 per hour or $120 per hour depending mainly on the complexity and scope of the project.

For instance, a task that entails proofreading some articles and emailing back the client may have a slightly different hiourly cost than one that requires researching for relevant keywords, creating content and posting it on the client site with images, inner linking, on-page SEO and so on.

Obviously, the contractor working on the second project will bill a higher charge by the hour than the first one.

Wrap up

One of the advantages you will get when you charge by the hour is that you can complete the task within a shorter time than the hours agreed. And for the most part, hourly billing is guaranteed! So start charging hourly rates this year.