What’s the best way for freelancers to charge: Pay per hour, or pay per project?

“How should I charge my clients?” might be the question that freelancers ask the most often. There are a lot of great things about freelancing, including having control over your work-life balance and being able to set your own hours, but deciding how to charge is tough. 

Before you can work out how to price your work, you need to decide whether you’d prefer clients to pay per hour, or pay per project. There are pros and cons to each approach, so you’ll need to think carefully about which option works best for you. 

Remember, this doesn’t have to be a once-and-forever decision. You might decide to begin with pay per hour, and then later in your career you think that pay per project will suit you better, or vice versa. It’s ok to change your mind. 

To help you come to a decision, we’ve brought together the pros and cons of both pay per hour and pay per project, so that you can compare them both.

Reasons why you should charge per hour

1. It’s easier and more transparent

When you ask a client to pay per hour, you just need to set your hourly rate, and that’s all. You don’t have to try to work out how much work is involved in order to come up with a project-based price. 

Clients also often prefer to pay per hour because it’s more transparent for them. They know that they are paying simply for the number of hours you work, and they can easily check on that with time-tracking software.

2. You can cope with project changes

Pay per hour is great if you’re working for a client who isn’t sure what they want, or you’re concerned that there’ll be a lot of “project creep” and the client will ask for something different after you’ve already begun. This makes pay per hour a good choice for long-term work, which could involve a number of different types of projects. 

With pay per hour, you’ll get paid for all the hours you work, no matter how many times a client changes their mind. If the entire project changes halfway through, you won’t have to negotiate a new price and risk having the client go somewhere else. 

3. It’s easier for clients to compare

When you charge by the hour, the prospective client can compare your prices with the prices offered by other freelancers. This is part of why clients often prefer to pay per hour, especially if you haven’t worked for them before. 

New freelancers typically charge per hour, because offering prices that can be easily compared with others on the market can help them to get a job when they haven’t yet built up a reputation. 

Reasons why you should charge per project

1. You can earn more income

Expert freelancers and contractors agree that it’s easier to grow your business when you charge per project. With project-based pricing, you can set prices according to your expertise and experience, and adjust rates whenever you like without having to explain your decision. 

Charging per project is also a good option for fast workers. If you take one hour to complete a project that takes someone else two hours, then you’d lose money if you get paid per hour. Per project pricing also means you can include time that isn’t easily trackable, like the great ideas you come up with while you’re in the shower or taking a walk. 

2. There aren’t any nasty surprises

When your clients pay per project, you both know how much the total price will be and how much the client will have to pay in the end. Although there are no guarantees, the client is a lot less likely to argue with you about the final cost or try to change the price when you already agreed on it beforehand. 

With project-based pricing, you can even request part of the fee as a deposit in advance. This is recommended for high value, long, or large-scope projects, so that you won’t have to wait until you’ve done all the work before you get paid. 

3. You don’t have to track your time

Some people are happy to work with a time tracker, but others don’t like knowing that someone is monitoring their working hours. They prefer to be able to stop and start work without it showing up on a time tracker. If you find it awkward or annoying to track your time, you’ll want to charge by the project and not per hour. 

Payoneer can make it easier for freelancers to get paid

As you can see, there’s no one right way to manage pricing. Deciding whether to ask clients to pay per hour or pay per project depends on your level of experience, how well defined the project is, and your own personal preferences. 

Although Payoneer can’t make that decision for you, we can help make the rest of your payment management go smoothly. 

Payoneer’s Request a Payment service lets you send an email payment request with an embedded payment link to any client, even if they don’t have a Payoneer account. The client can easily pay your bill through Payoneer, credit card, or other payment method, you’ll get your funds more quickly, and you’ll both save time and money on payment processes.