Freelance pricing · reverse solve
Can this fixed fee carry the work?
Start with the fee the client offered. Work backwards through your rate, expenses, risk buffer and target margin to find the hours you can safely spend.
A fixed fee is a budget with an hour limit. This check turns the fee into a maximum-hours guardrail, then compares it with your planned effort.
Maximum hours = ((fee × (1 − margin)) ÷ (1 + risk)) − expenses, divided by rateFixed-fee inputs
Reverse solve
How the reverse solve works
The target margin first defines how much of the fee can become cost. The risk buffer then reserves part of that cost budget for uncertainty. Expenses come out next; what remains is the labour budget. Dividing that budget by your working rate gives the maximum hours.
Target cost with risk = fixed fee × (1 − target margin)Labour budget = target cost with risk ÷ (1 + risk buffer) − expenses
Maximum hours = labour budget ÷ working rate
The calculator also shows your effective hourly rate if the fee is accepted and your realized margin at the planned hours. If maximum hours is lower than planned hours, the offer needs a narrower scope, a higher fee or a consciously lower margin.
Margins are based on revenue, while markups are based on cost. The distinction is explained in AccountingTools’ margin and markup reference. Tax is excluded.
Frequently asked questions
What does a fixed-fee project hourly rate mean?
It is the fee left after direct expenses divided by the hours you expect to spend. It is a useful reality check, not a replacement for a rate that covers your business.
What if maximum hours is zero?
The fee cannot support the selected rate, expenses and margin assumptions. Raise the fee, reduce the scope, lower costs or revisit the margin deliberately.
Does this include tax?
No. The calculation stops at project economics and leaves taxes out.
Estimate only
Use the result as an internal guardrail and write the included deliverables, assumptions and revision limits into the agreement.