When starting a new freelance career, one of the most important decisions you have to make is deciding whether to charge per project or by the hour.
This decision will determine how well you earn and how much work you have to do as a freelancer.
Both pricing methods are used by different types of freelancers, but which one should you choose?
The short answer—don’t use hourly pricing!
And here’s why.
Hourly vs Flat Rate Pricing
Try to imagine this scenario. You’re a freelance logo designer. It typically takes around 2-3 days for you to finish a logo design. But, you only work about 5 hours per day. Because, well you have house chose and kids to take care of.
If you charge $50 per hour, that means you’ll earn $750 for finishing a logo design in 3 days. Not bad, right?
But, what if you’re really good at what you do and you finish a logo in just 10 hours? Does that mean you only get to charge $500 even though deliver at the same quality?
Or what if it took you longer than 20 hours to find inspiration and put together the logo design, would the client be okay with paying extra?
Basically, charging by the hour punish you for being good! Veteran designer, Chris Do says it best in this video.
It Takes Away Your Freedom
When you’re using hourly pricing, you are rewarded for working long hours on a project.
If you’re an efficient freelance writer who’s able to write 2 articles in an hour, you’ll have to charge a ridiculous hourly rate.
Clients will definitely get scared when you tell them your hourly rate. And when you try to convince them that you write 2 articles in one hour, they will judge you for it. They’ll think that since you write fast, your articles will end up being terrible and low quality.
This is how hourly pricing takes away your freedom. You must work a set amount of hours on a project, otherwise, you lose money. As a freelancer, this is a terrible position to be in.
Ruins Your Creativity
Unlike regular office jobs, most freelance work requires creative thinking.
You can’t come up with a logo design right away. It takes a while to come up with inspiration. You can’t write a great article without doing lots of research.
Sometimes, this creative process takes longer, especially when the subject area is new to you. But, if you’re already familiar with the topic, you’ll be able to find inspiration faster.
Either way, when you’re using hourly pricing, you will only be punished.
You won’t have the freedom to take all the time you need to find inspiration. If you take longer, the client will question you.
If you’re able to find inspiration faster and finish the project early, you’ll earn less for the job.
Hourly pricing doesn’t give you any room for creativity.
You Don’t Earn More for Complex Projects
Not all projects are the same.
Even when you’re writing articles or designing logos, some projects will take more time.
This happens to me all the time. Even though I’ve been working as a freelance writer for many years, I still struggle to write articles from time to time.
Sometimes the topic needs more research to understand. Sometimes you’ll have to install and use specific tools and apps. Or even watch YouTube tutorials to learn more about a topic.
If you’re charging hourly, you won’t earn more for the extra effort it takes to finish the job.
You’re Always Under The Microscope
If you’re working for a remote team, you will always have to use time tracking software to track your work hours.
Even if you’re a freelancer, most clients will even ask you to provide time tracking data as proof of how long it took you to complete the job.
In a way, it’s basically like working at an office. And it’s one of the reasons why I dislike the office work culture.
Hourly pricing will force you to use time tracking apps and you’ll often find yourself monitored by your client.
You Have To Work Longer Hours
Unless you’re a reputable expert freelancer, you won’t be able to ask for an hourly rate above $100.
There are some skilled copywriters, developers, and coders who charge thousands of dollars per hour. But it’s not easy to get there let alone find clients who are willing to pay such a rate.
So when charging by the hour, you’ll often find yourself working longer hours to earn a solid income.
You’ll wish you had a boring office job instead.
Hourly pricing is bad for most freelancers, especially for creatives. But, it’s effective for some as well.
For example, hourly pricing is great for technical freelance work, like coding or data entry work. In fact, there are freelancers earning over $2,000 per hour in the programming industry.
Images via Freepik.com
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I am a Top Rated Plus designer at UpWork, I work mostly at a fixed price and I avoid working by the hour whenever possible. You described the reasons very well, and you are right that working by the hour kills creativity. My clients pay for the end product – book or magazine design. They do not have to worry about time, but about the quality of service they receive. Hourly work is good for certain jobs, but not for every type of job, especially creative projects.
Thanks for sharing your insights. Appreciate it.