Why Writers Charge by the Project

Freelance writers earn their income in one of two ways: charging by the hour or by the project.

Throughout my 17-year freelance career I have primarily charged project-based fees because (1) I believe clients prefer knowing what a project is a going to cost and (2) I earn more income than I would by charging hourly for the same work.

In fact, every year, I earn thousands of dollars more than I would have had I charged hourly (at my then current rate) for all the work I billed. Since most of my assignments are repeat work for existing clients, I take that to mean that my clients were all quite satisfied with how and what I was charging.

By charging project fees, you get paid for the value of the work you produce, not how many hours it takes to do it. As you get better at knowing how much time it takes you to do certain jobs, you can price them at fees that compensate you better than your hourly rate.

This means, of course, you have to have an hourly rate even if you’re not going to charge it. There are many ways to calculate an hourly rate, but in the end they all boil down to the same concept:

the gross income you need to bring in to pay yourself a salary and benefits, run and grow your business, and fund your retirement

divided by

the number of hours you can bill in a year—which for freelancers not working through staffing services will be about 1,000 hours a year.

Hourly billing has its place—for poorly defined projects that can’t be estimated and for beginners who haven’t done enough jobs to know how long they take. But mostly, an hourly rate is a cap on your income because what you can earn will always be limited by how many hours you can bill. With well-quoted project fees, you can earn more money in the same amount of time.

Many writers who charge hourly often find themselves charging project fees anyway—unfortunately, with not very good results. I’m referring to the all-too-common case where the hourly-charging writer gives the client an “estimate,” works many more hours than they estimated (through no fault of the client’s), fears charging the client more than what they expected, and so voluntarily cancels the charges on the excess hours. That writer just turned their estimate into a flat fee. By the way, that’s the main problem with estimates. You or the client might say “estimate,” but the client is really thinking “quote.”

Project fees are easy to understand and fit nicely into today’s “value” mentality … the client decides if $X is worth paying for Y piece of work. Plus, project fees don’t penalize you for being efficient and don’t penalize the client for your being inefficient. Finally—because it bears repeating—hourly rates are an income cap: your income is limited by the number of hours you can bill. Project fees, properly calculated, let you earn far more than you could by billing hourly.

Ken Norkin is an ADDY Award-winning copywriter and full-time freelancer specializing in business-to-business marketing communications for technology-based products and services.

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