Pricing, scope and agreements

How to price so you actually earn, how to write down exactly what is included, and how to agree it in writing before any work starts.

Hourly versus fixed price

Also called fixed price, fixed-price, hourly rate, hourly contract

What: Hourly means the client pays for time worked; fixed price means one price for a defined result. Packages and retainers are fixed prices for a set scope or a set period.
Why: Hourly protects you when scope is unclear; fixed price rewards you for working efficiently and is easier for clients to approve.

Watch out

Quoting a fixed price for vague work, then absorbing every extra request for free.

Rate floor

What: The lowest rate that still covers your costs, platform and payment fees, taxes and the unpaid hours spent on proposals, messages and admin.
Why: Only part of your working time is billable. Knowing your floor stops you accepting work that pays less than it costs you.

Code

Monthly target (after fees and tax):  400
Billable hours per month:             40
Needed per hour:                      10
Fee 15% and tax 10%: 10 / 0.75       13.33
Quote at least:                       14

Watch out

Dividing your target by all the hours you work, including unpaid proposal and admin time.

Pricing in the fee

What: Setting your price so that what you keep, after the platform or payment fee, is what you wanted to earn. Divide your target by one minus the fee.
Why: Platform fees come out of your earnings, not on top of them. Forgetting this is the most common reason beginners earn less than they expected.
Example: To keep $20 an hour on an Upwork contract with a 10 percent fee, charge $22.23. To keep $80 on Fiverr, where you receive 80 percent, price at $100.

Fiverr seller fee

What: Freelancers receive 80 percent of what the buyer pays for an order, including extras and tips. Buyers pay a separate service fee on top at checkout.
Why: Every price you set is really 80 percent of that to you, so a $5 Gig pays $4 before any withdrawal fee.

Scope of work

Also called SOW, statement of work

What: A written list of the deliverables, what is not included, the client's inputs, the timeline and how the work will be accepted.
Why: It is the reference point for every disagreement. With it, "can you also add" becomes a polite quote for extra work instead of an argument.

Code

Deliverables: 5-page site, contact form, mobile layout
Not included: copywriting, logo, hosting costs
You provide: text and photos by 3 March
Timeline: first draft 10 March, final 17 March
Revisions: 2 rounds on the first draft
Done when: live on your domain and you confirm

Milestones

What: Splitting a project into parts, each with a deliverable, a date and a payment. Upwork holds fixed-price milestone money as project funds, and Fiverr offers milestones on larger orders.
Why: You get paid as you go, the client sees progress, and a problem costs one milestone rather than the whole project.

Watch out

On Upwork, starting work before the milestone shows as Funded, which leaves it outside payment protection.

Revision limit

What: The number of rounds of changes included in the price, and what counts as a revision versus a new request.
Why: Without a limit, revisions never end. With one, extra rounds are a normal, paid option rather than a favour.

Change request

What: A written note when the client asks for something outside the scope: what is new, its extra price and how it moves the deadline, agreed before you do it.
Why: Scope creep is the main way fixed-price projects become unpaid work. A short change request keeps the relationship friendly and fair.
Example: Happy to add the booking calendar. It is outside the agreed scope: $60 and two extra days. Shall I add it as a new milestone?

Written agreement

Also called freelance contract

What: The terms both sides agree before work: scope, price, payment schedule, revisions, deadlines, ownership, confidentiality and how either side can end it.
Why: On platforms the platform terms apply, but you still write the scope in the contract or order. Direct clients need a signed agreement as their only protection.

Watch out

Agreeing everything on a call and writing nothing down, then remembering it differently a month later.

Ownership of the work

Also called IP transfer, intellectual property

What: Who owns the code, designs or content you produce, and when ownership passes to the client, usually on full payment.
Why: Tying ownership to payment protects you, and saying so clearly reassures clients that they will own what they paid for.

Watch out

Reusing a client's paid work in your portfolio or another project when the agreement does not allow it.

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