I work on retainer, I wouldn't do it any other way. (unless there is no other option) Fixed price is awful. Projects are dynamic, things change. Communicating this to the client gets ugly pretty quick.

Clients pay up front for a block of my time, say 80 hours. I then work up to 80 hours and repeat.

This is fair for both parties and clients can change there mind as many times they like, or see as many revisions as they want

"Pricing hourly punishes efficiency" - Jessica Hische, The Dark Art of Pricing

I did project-based and hourly work for years and hated it, then I switched to daily pricing, and eventually weekly pricing, and haven't looked back. I have a very basic ongoing weekly agreement with clients where I put in "approximately 40" hours a week in exchange for my weekly rate (mid thousands). Either party can cancel with 2 weeks notice. Some weeks I work a bit more, some weeks a bit less, but I always feel like I'm part of the team while I'm on the assignment, and it allows us to be much more flexible with the inevitable changes that will happen after the first spec was created. If you can't find one client to do the weekly thing with, then stick to daily rates for multiple clients. That worked pretty well for awhile, but I found that the mental overhead of managing multiple products effected my work.

Having an hourly figure simply means using that in your project estimate, for which you want a high and low.

For example a super simplified contract might look like:

• Research, H: 20hrs | L: 10hrs
• Sketching, H: 30hrs | L: 25hrs
• Wireframes, H: 30hrs | L: 25hrs
• UI Mockups, H: 40hrs | L: 30hrs
• Prototypes and Deliverables, H: 100hrs | L: 85hrs

Then simply factor in your hourly rate and you have 2 rough estimates on what the project should cost.

There are tons of good tips here about how to charge and some are really great way of charging if you aren't accustomed to working hourly/daily/weekly.

On a high level, It takes a little bit of experience to give client an upfront accurate estimation. When I do hours, I tend to overestimate a task by 20% as a quote and work my way towards that. At the same time I make sure they understand that it's an estimate, then log the hours to show them. This way if the task is done quicker and the client are efficient, we get to the bill which is usually lower than the quote. It leaves a little nice feeling for someone who aren't overspending and I usually get paid on what I expected.

Whatever you do, make sure you get them to sign an agreement before any work begin. Saved my ass tons of time on painful client or those who refuse to pay on time.

Usually, I don't charge per hour. Basically, I estimate how much work in hours is something going to take, then add a "safe zone" to that estimate (let's say multiply the very optimistic number of hours by a factor of 1.2 up to 1.5 depending on the scope of the project). This kind of "safe zone" can include everything from researching stuff to iterating a couple of times. Then I sign a contract with the client for a fee for that particular project.

I've gotten pretty good at estimating how much is something going to take me, so I usually stay inside the estimates calculated above. Though I've had cases when I did work three times as much as I've estimated but that is my fault and I never charge the client for those additional hours if the work that is done is inside the original statement of work.

But, even though the project itself is fixed-price, I always include a clause where any additional minor work is then billed hourly and usually at a higher rate than average. But also, if the additional work turns out to be very large in scope, that almost always gets separated into an addition to the original contract.

What I would suggest is quote projects in days and charge hourly. Estimates don't have to reflect the exact amount of time worked. you just want to set the best possible expectations which means to have your client expect you to work more than you think you will really need.

Example: Lets say for the sake of this explanation you charge $100/hr and work 6 hours a day. A new client requests a quote and you think it will take you 5 days. Take the number of days you think it will take and multiply by 1.2-1.5 so thats ~6-7 days. 6 days x $600 a day = $3,600.00 for an estimate. Then track your time and bill on the schedule you set for the time worked, hopefully it should actually come out to $3,000.00 in total (5 days like you thought) and now they're happy with the work you did, taking less time than they thought and now they saved $600. Happy client is happy.

Like a few others here, I don't charge by the hour. I also don't charge by the project unless I have a very, very clear idea of the project scope, which most clients are unable to provide.

I charge by the day, or by the week.

Brennan Dunn has a really great article on pros and cons of hourly vs weekly vs monthly vs project here:

http://doubleyourfreelancing.com/the-definitive-guide-to-project-billing/

And Thomas Ptacek breaks down how awesome weekly billing beautifully here: https://news.ycombinator.com/item?id=3421770

You do a proposal for a client. You give an honest conservative estimate of how much time it's going to take.

Say it's a Rails CRUD app with no special domain code. Ok, 2 weeks, broken out into 2 billable weeks. The proposal says something like:

Week 1: 5 person/days, $5,000 (Setup, Discovery, Backend) Week 2: 5 person/days, $5,000 (Front-end, testing, delivery) TOTAL PRICE: $10,000

Accompanying your proposal is a SOW that says something to the effect of: This project will be billed on a time/materials basis, starting Monday January 23rd and continuing for 10 contiguous business days through February 3rd. If additional time is required to complete this project, it will be billed at a rate of $1,000 per person day, provided that notice is provided within 1 week of February 3rd.

Presto, a proposal for a project that costs $10,000 billed time/materials at $1k/day (again, lowball figs).

Now, 2 weeks to complete this project is conservative. Also built into every proposal, whether you like it or not, is the collection of moments in every working day where you are not productive. So ask yourself, if I took 100 provigils† and eliminated ALL NON PRODUCTIVE TIME from my schedule for the entire next 2 weeks and completed this project in 7 days instead of 10, who should get that $3,000 of value I just generated?

The answer to that question is "you".

You don't generally want to rig your contracts so that they are padded out with unproductive time the client pays for; that's called "rustproofing" and it's bad business. But at the same time, clients actually value determinism more than they value any single billable day. If the client accepts a project for $10,000, they are going to be way more irritated if the project takes 15 days to finish than they are if you finish in 9 days instead of 10.

You have knobs to turn here too. Say you finish in 9 days instead of 10 because you drug yourself into working 18 hour days. Keep the $1,000. Say instead you finish in 5 days instead of 10 because the project turns out to be way simpler than you expected. Well, in that case, give the client their $5,000 billable week back. Think of this in terms of a minimum billable increment, where you don't credit partial weeks – if you had to work at all in that week, that week is shot for other clients – but will credit full weeks.

You see now how it's maybe not in your best interests to have your minimum billable increment be "one hour"?

† Please don't do drugs.

When I did freelance work, I always charged hourly. It might not be the best way to charge, but it worked ok for me.

The typical rate for a designer is going to be around $100/hour, could be $50 more or less depending on your experience.

When you sit down to work on the client's project, start the clock. When you start doing something else, stop it.

If you are surfing the web for hours to gather inspiration, probably don't count that. Don't count thinking while in bed or drinking coffee. It is assumed that there will be some time spent thinking about the project outside of your billable time, that's sorta just factored into the cost.

It's not a perfect system, but we need some way to gauge how long people are working on stuff. It tends to work out if you have the right attitude and are being fair. Think about what you expect the entire project should cost and then make a good faith effort to hit that target.

The nice thing about hourly is that it allows the client to be flexible about the scope. They can throw new tasks at you and it won't matter to you because you just charge more hours.

With project rates, the project needs to be well-defined before starting which is never easy to do accurately.

Get this book, it is by far the best book on pricing and running your design/dev shop and will give you strategies on these issues you are having:

The Designer's Guide To Marketing And Pricing: How To Win Clients And What To Charge Them

It's interesting to judge blocks of time and rates. Even if you sell time. Does working 40 hours = selling exactly 40 hours? What if you finish earlier? What if you need to take more time?

We sell resources by the week, and it's all results oriented, but based on projects. So we do estimate for a project, and then sell the projects by the week, and pre-sell 2-6 months at a time.

During the project, we can provide any changes to estimates based on progress, or updated requirements.

At the end of the day, you're really charging hourly if you count the hours. If you work full time, you only really work about 25-30 hours a week. So how can you sell 40 hours per week?

Sell weeks, and give an appropriate amount of work that can be completed in that week, then move on.

I will send my clients an itemized list of services and charge them per task, what I believe is fair. I don't have a standard price system set up because I get a big range of clients.

However, if the client insists on hours. I will take my itemized list, break it down into hours. Then I take my estimated hours and multiply it by 2.5. That will give me a safety net.

If they want to add features or exceed what I deem is fair in terms of my time. I will work that out with the client, and usually provide a new itemized sheet.

I am very organized and transparent with my clients. I use Trello boards to show my progress in projects. Every client I have, can see where their projects are at any time.

The best method I have found so far is to go in-house and charge the company or agency by the hour. This way you can prove how long you have spent working on it, as you have been in their office. It also makes communication a lot easier and the experience much more personal for the client which is generally preferred.

From my experience fixed pricing sucks, but sometimes its the only method clients will accept.

Try what Mike said above in negotiating a block of time. Like 80 hours or 4 weeks. It's also helpful to break up the work into chunks and associate a amount of time with it so clients can see what they're paying for.

Ultimately you want to get to a point where you're hired for the value you're creating. I wrote out some thoughts on it here: https://medium.com/@n8garvie/we-dont-sell-hours-here-acb46499bb00

I understand the issues with hourly work, and I felt the same way as many others who have commented, but clients always ask me how much I charge by the hour and that works for me.

As for your PPH, you need to factor in your bills, your tax, VAT if applicable, your equipment. If the client insists on emailing you 30 times a day, factor that in too. It's your time, after all.

But it's also their money, use that time efficiently and always communicate with the client to ensure that their money is being well spent.

I usually don't charge hourly for design work, unless it's maintenance and small work (eg.: vectorize some stuff,...).