Project Pricing Calculator
$6,055.52 fixed price
Quote this for the whole project. You stop earning your rate past 48 hours.
- 40 hours at your rate
- $4,629.60
- Contingency at 20%
- $925.92
- Costs passed through
- $500.00
- Break-even hours
- 48
How this is calculated
A fixed price is a bet that your estimate is right, and the contingency is what you stake against being wrong. This calculator starts from the two numbers you actually know, which are how long you think the work will take and what your time is worth, multiplies them, and then adds a percentage on top for the work you have not thought of yet. Anything you buy on the client's behalf, such as stock photography, a plugin licence or a font, is added afterwards rather than marked up as time. The number that matters most is the last one: break-even hours. That is the hours you estimated plus the hours the contingency buys you, and it tells you the point at which the fixed price stops paying you what you are worth. What the client reimburses you for does not move that line, because reimbursement is not payment for your time. Past it you are working at a discount you never agreed to, and the further past it you go the deeper the discount gets. Most freelancers who lose money on fixed-price work do not lose it by quoting too low, they lose it by never working out where that line was.
Worked example
Forty hours at $115.74 is $4,629.60 of work. A twenty percent contingency adds $925.92, which buys you eight hours of being wrong. Adding $500 of licences the client is paying for brings the quote to $6,055.52. The forty hours and the eight the contingency buys are forty-eight hours of your time that the quote pays for at your rate: deliver in less and you beat your rate, deliver in more and you are subsidising the client. The $500 does not move that line, because it reimburses what you spent rather than paying for an hour of your work.
Inputs: 40 hours estimated, $115.74 an hour, 20% contingency, $500 of pass-through costs
Result: $6,055.52 fixed price, break-even at 48 hours
What this assumes
- The contingency is a percentage of the estimated work, not of the total, so pass-through costs are not padded.
- Pass-through costs are quoted at what you pay for them. If you mark them up, enter the marked-up figure.
- Break-even hours count only the work you are being paid for — the estimate plus its contingency — against your hourly rate. Costs you pass through are excluded, and the figure says nothing about whether the rate itself is right.
Questions
- How big should the contingency be?
- Fifteen to twenty-five percent is normal for work you have done before, and thirty to fifty percent for anything with an unfamiliar system, an unresponsive client or a vague brief. If the honest number feels embarrassingly high, that is information about the project rather than about your pricing.
- Should I show the client the contingency line?
- Usually not. Clients buying a fixed price are buying certainty, and itemising the buffer invites a negotiation about whether you will really need it. Quote the total. Keep the breakdown for yourself.
- What if the project runs past break-even?
- Finish it, then work out what the real effective rate was and why the estimate missed. A fixed price that overruns is not a disaster, it is a data point. The disaster is repeating the same estimate on the next three projects because nobody measured this one.