hourly-vs-fixed-price

The actual difference

Under hourly billing, the client carries the risk of the unknown: if the integration takes twice as long, they pay twice as much. Under fixed price, you carry it — and you should be paid for carrying it. That's the whole economics. Fixed price isn't "hourly with extra steps"; it's hourly plus an insurance premium, and freelancers who quote fixed without pricing the insurance are simply giving it away.

The math, side by side

Say your floor is $140/hr and the honest estimate is 60 hours with fuzzy edges:

Priced right, fixed work pays a premium when you estimate well and degrades gracefully when you don't. Priced wrong, its best case merely matches hourly and its normal case is a pay cut. The buffer is the entire difference — the project calculator builds it in.

When each one wins

• Hourly: discovery work, legacy codebases, "can you also just…" clients, open-ended retainers, anything where the unknowns belong to the client's systems.
• Fixed: work you've done five times, tight written specs, productized services, clients who need a number for a budget approval. This is also where the real upside lives — efficiency you build becomes margin instead of fewer billable hours.
• The hybrid that usually wins: a small fixed-price discovery phase first, then a fixed quote for the build written against the spec discovery produced. The client buys certainty twice; you never price the unknown blind.

The clauses that make fixed price safe

1. Written scope with exclusions. What's out matters more than what's in.
2. A change-order mechanism. New scope = new number, agreed before the work, at your hourly floor or above.
3. Capped revision rounds. "Two rounds included" turns the infinite-tweaks client into a paying one.
4. Deposit and milestone payments. Cash follows progress, not completion — you are not your client's lender.