Fixed Rate Vs Hourly Billing: Which is Better for Freelancers?

When you’re a freelancer, billing is one of the most important aspects of your job. You need to decide how you’re going to charge for your services, and there are a few different ways to do it. You can bill hourly, or you can charge a flat rate.

There are pros and cons to both methods, and it often depends on the type of work you do. As a general rule, hourly billing is best for project-based work, while flat rate billing is better for ongoing work.

Here’s a more detailed look at the pros and cons of each method:

Hourly Billing


  • You can accurately track the time you spend working on a project and bill accordingly.
  • This method is transparent, so your clients know exactly how much they’re paying for your time.
  • Hourly billing is great for project-based work, since you can easily estimate the amount of time a project will take.
  • You don’t have to worry about getting underpaid for a project.


  • Your creativity may be rushed in order to meet client budgetary demands.
  • Working faster does not equate to more money.
  • Clients may be hesitant to pay hourly rates, since they don’t know how much the final bill will be.

From the Client’s Perspective

Now you should have a firm grasp of the pros and cons of hourly billing. But one thing that will surely set you apart from the rest of all of the freelancers out there is to take the client’s perspective into consideration. So, here are the pros and cons of paying hourly vs. flat rate.


  • They know exactly how much time is being spent on their project.
  • They can add or subtract the amount of work as needed to help fit their budget.


  • The price can vary from project to project, making it difficult to budget.
  • There is potential for the price to add up to more than expected.

Something to Keep in Mind:

One thing to keep in mind about hourly billing is that the client may prefer or require to see proof of the hours you have worked. There are many great platforms and software out there that can help with this. These track your time when you clock in and clock out, and monitor your computer screen. But if it makes you feel weird to have someone watch you work your creative magic, or you think they may judge you based on your screensaver, then you may want to stick with fixed rate billing.

Flat Rate Billing


  • With flat rate billing, you can charge one price for an entire project, no matter how long it takes you to complete it.
  • This method is simple and easy to understand for both you and your clients.
  • Flat rate billing is great for ongoing work, since you can agree on a price upfront and then bill at the end of each month.


  • If a project takes longer than expected, you may not be able to bill for all the hours you’ve worked.
  • You need to be careful when estimating projects, since you don’t want to undercharge or overcharge for your services.

From the Client’s Perspective:

Now that we’ve covered the pros and cons of fixed-rate billing for the freelancer, let’s dive into the pros and cons from the client’s perspective.


  • Easy to budget.
  • No unexpected charges.


  • It’s hard to know if you’re being charged a reasonable amount.
  • It’s difficult to know how much time was spent on the project.

Don’t Make This Mistake:

One of the biggest mistakes you can make as a freelancer is providing free, unlimited revisions. This mistake is easiest to make if you’re charging fixed-rate. That’s because, with charging hourly, any necessary revisions just get tacked on, based on how much time it took.

But if you’re charging a fixed rate, it can be easy to get sucked into doing revision after revision for free. Don’t do this! One small revision can easily turn into hours and hours wasted. Your time is valuable. If you’re doing fixed-rate, set parameters on how many revisions you’ll allow, and for how much. This could be one free revision for your fixed rate price, or an additional fixed-rate charge for each revision the client wants. Whatever you choose, stick with it.

Otherwise, if you run into a problem client, they could end up milking you of everything you’re worth, wasting your time when you could be getting more business. You don’t want to fall for this one.

How to Set Your Price

Whether you’re a new freelancer or have been at it for a while, one of the most common questions you’ll face is how to set your rate. What’s the right way to go about it? The answer depends on whether you choose hourly billing or fixed rate billing.

But it might not be that simple either. For both hourly and fixed rate billing, there are a number of factors to consider when setting your price. And those factors may change based on the client, the project, and even the type of area you reside in.

So we’re going to go over these factors to help you determine the best way to bill for you.

Hourly Billing
If you’re a freelancer, one of the most important questions you’ll need to answer is how much to charge for your services. There are a few factors to consider when setting your hourly rate, and it’s important to strike a balance between getting paid what you’re worth and being competitive in the marketplace.

One thing to keep in mind is the cost of living in your area. For example, if you live in an expensive city, you’ll need to charge more than someone who lives in a rural area with a lower cost of living.

You should also consider your experience and skillset when setting your rate. If you’re just starting out, you might need to set your price slightly lower to attract clients. However, if you have years of experience under your belt, you can charge a higher rate.

Another thing to consider is the type of work you’ll be doing. If it’s something that requires a lot of skill or experience, you can charge more than if it’s something that anyone could do.

Ultimately, the best way to figure out how much to charge is to research what others in your field are charging and adjust based on your individual circumstances. With some trial and error, you should be able to find a rate that works for both you and your clients.

Fixed Price Billing
There are a few things you should keep in mind when determining your price if you’re doing a fixed price. The first is what your skills and experience are worth in the marketplace. If you’re just starting out, you may need to set your rates a bit lower in order to compete with other freelancers who have more experience. On the other hand, if you have a rare skill set or extensive experience, you may be able to charge a premium.

It’s also important to consider how much work you’re willing to take on and how much time you’re willing to commit to each project. If you’re only looking for part-time work, you may be able to set your rates higher since you’ll have less flexibility in terms of taking on additional projects.

Finally, it’s important to be upfront about your rates from the start. Trying to haggle after the fact can damage your professional reputation and make it harder to get future clients. Ultimately, there’s no one perfect way to price your services as a freelancer. However, by taking the time to consider all of these factors, you can ensure that you’re able to find a rate that works for both you and your clients.

Which is Better for you?

Hourly billing is preferred if you’re not sure how much time you’ll need to spend on a project. For example, if you’re cutting your teeth on a new skill and don’t know how to gauge your time yet, stick with hourly.

On the other hand, if you’re doing ongoing work, hourly billing can become cumbersome. In these cases, I recommend fixed-rate billing. And, as your skills improve and you’re able to do things faster for the same quality, you can save time on your end without sacrificing how much money you make.

Ultimately, the billing method you choose depends on the type of work you do. If you’re doing project-based work, hourly billing is usually the best option. But if you’re doing ongoing work, flat rate billing may be a better fit.

We hope this article has been helpful in guiding you toward the best billing solution for you as a freelancer. Whether you choose an hourly or fixed rate, the best thing to remember is, to be honest about your pricing and be sure your client feels like they’re getting the quality they are paying for. As long as you do that, you’re on your way to success.

So what are you waiting for? Get out there are start billing!

We greatly appreciate you taking the time to read our blog! If you found this useful please be sure to share it with your network! If you have any questions about our program be sure to contact us. Thanks again and happy freelancing!

School For Freelancers Community