How To Charge For Web Development Work

Web development is a non-tangible product, meaning the product is not a physical one. Thus it is harder to estimate. Price are subjective and related to hourly rate. Even the hourly rate are different between experienced developer and rookie developer. So, how do you know what to charge for your web development work ?

The article “How To Estimate a UX Project” might help. While it is aimed for UX (User eXperience / User Interface) type of work, it is also applicable to other web development works.

How to charge for design work

There are typically three methods you can take when giving your client a quote for UX and design work:

fixed price,
hourly rate (often called time & materials), and
ballpark figure + hourly rate.
The cost for each is based on the same hourly rate, and the process of estimating is the same. There are, however, subtle differences between these methods, and each has their advantages and disadvantages.

Fixed price

Fixed price, as the name suggests, means providing the client with a flat fee for the work. This is great for the client—they understand upfront what they’ll need to pay, and there will be no surprises. However, this approach places all of the risk with you, the designer. If the project runs over time on a fixed price job, you may have to wear the extra cost (depending on your contract).

Due to the risk involved, I would recommended that you be very comfortable with the full scope of work before agreeing to a fixed price schedule. Ensure you watch for scope-creep while the project progresses, and be sure that your contract leaves no room for ambiguity.

Many design firms add a percentage of “padding” hours to fixed price estimates. This allows them to weather any unforeseen scope and reduces the risk.

Hourly rate (time and materials)

Charging an hourly rate—also known as time and materials is the fairest, most accurate method, since you simply track the time it takes to do the work and charge for that time at the end of the project (or at agreed milestones).

While this is great for the designer, the client harbours all of the risk in this situation; if the project overruns due to underestimating or changes in scope, the clock keeps running. It is typically rare for clients to agree to pay by time and materials on large projects due to the risk, but it’s quite common for much smaller gigs.

Ballpark figure + hourly rate

A ballpark figure + hourly rate is a combination of the previous two methods. In this instance, the designer provides the client with a fixed (ballpark) cost based on their estimations prior to starting the project, but with the understanding that if the project overruns they will continue to charge, tracking the additional hours.

This is a good solution for projects where the full scope isn’t known at commencement and the client doesn’t want to invest time in preparing a detailed brief.

Other pointers includes what to charge and estiimate how long it will take to complete the work.

What’s your experience ?