Hourly vs. Flat Rates for Graphic Design Projects

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A common decision to be made when starting a graphic design project is whether to charge a flat or an hourly rate. Each method has pros and cons, as well as ways to work toward a fair deal for both you and your client.

Hourly Rates

What We Like
  • Fee depends on actual hours worked, so you're protected against "scope creep."

  • Likewise, client pays for actual work hours, not padding built into a flat rate.

What We Don't Like
  • You are not guaranteed a minimum payment for the project.

  • The client doesn’t know exactly what the project will cost.

  • The rate is based on hours, rather than value. For example, a logo design might take 15 hours, but its value to the company could be much higher.

In general, charging an hourly rate is best for work that's considered an update, such as changes to a website after launch or revisions to an existing print design for additional uses. It also can be the right choice for a small project, especially for one that's particularly difficult to estimate.

Base your estimate on a range. For example, you might tell your client, “I charge $XX per hour, and I estimate that the job will take five to seven hours.” If you can't nail down a small range at the start, provide a wider range (such as five to 10 hours) and explain why. This gives your client a reasonable expectation of outlay while allowing for variability.

Flat Rates

What We Like
  • The client knows what they are paying from the beginning (unless there are changes to the scope of the project).

  • The designer is guaranteed an amount, even if the job is finished quickly.

What We Don't Like
  • The job might take longer than expected (a possibility your contract should address).

  • Clients sometimes ask for extra revisions, etc. without expecting to pay more (again, cover this in your contract).

Charging a flat rate is common for large design projects, and for repeating projects for which the designer can accurately estimate the hours. Often, a flat rate is based on an estimate of hours a project will take to complete, multiplied by the designer's hourly rate.

In other cases, the value of the finished project is higher than just your estimated hours. For example, logo designs are often valued highly regardless of actual hours worked, because of their frequent use and visibility. Other factors that can affect the price include the number of pieces printed or sold, and whether the piece will be used once or multiple times.

Depending on the type of project, you might add a percentage to cover client meetings, unforeseen changes, email correspondence, and other activities that an hourly estimate doesn't reflect. How much to charge and how to approach it with the client are up to you.

A Combination of Hourly and Flat Rates

Often, the best solution is a combination of these approaches.

If you feel the job might exceed your estimate, discuss this with the client as soon as possible before proceeding, and tell them why your estimate is changing. Perhaps the project has taken an unexpected turn, or the client is asking for more changes than you'd expected. It happens. In any case, the last thing you want to do is slap the client with a surprising bill at the last minute and have to explain yourself then. The solution is communication: Discuss this with your clients as early as possible.

If you choose to charge a flat rate for a project, this doesn’t mean you are working for your client for an unlimited number of hours until the project is complete. While there may be a little more flexibility than when working by the hour, your contract should lay out the scope and terms of the project. To avoid an endless project, you can:

  • Include a detailed outline of the project so you can adjust your rate if the outline changes. For example, if a two-sided, text-heavy brochure turns into a four-panel folded piece with custom illustrations, the price should change.
  • Clearly spell out how many rounds of changes or edits are included in your flat rate.

Even when quoting a flat rate, include the hourly rate that you will charge if extra work is needed that is beyond the scope of the agreement.

In the end, experience will help you decide how to charge for your projects. Once you have completed a number of jobs, you will be able to more accurately provide flat rates, control your projects through your contracts, and communicate with your clients about budget issues.