How to Determine a Flat Rate for Graphic Design Projects

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How to Determine a Flat Design Rate

Graphic designer working with drawing tablet in office
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Charging a flat rate for graphic design projects is often a good idea because both you and your client know the cost from the start. Unless the scope of the project changes, the client doesn’t have to worry about going over budget, and the designer is guaranteed a certain income. Determining a flat rate isn't as difficult as you think.

Determine Your Hourly Rate

In order to set a flat rate for a project, you must first have an hourly rate. While your hourly rate is partially determined by what the market can bear, there is a process to help you decide what to charge by the hour. If you do not yet have an hourly rate, follow these steps:

  1. Choose a salary for yourself based on previous full-time jobs.
  2. Determine the yearly expenses for hardware, software, advertising, office supplies, domain names and other business expenses.
  3. Adjust for self-employment expenses such as insurance, paid vacation and contributions to a retirement plan. 
  4. Determine your total billable hours in a year.
  5. Add your salary to your expenses and adjustments and divide by the total number of billable hours to arrive at an hourly rate.

Estimate the Hours

After you determine your hourly rate, estimate how long the design job will take you to complete. If you have completed similar projects, use them as a starting point and adjust for the details of the project at hand. If you haven't completed similar projects, go through each step of the process and estimate how long it will take you. Estimating hours may be difficult at first, but over time you will have a body of work for comparison. This is why it is important to track your time carefully to see if and where you misjudged the time to complete a job.

A project involves more than just design. Include other relevant activities such as:

  • Several rounds of changes (the number of rounds should be in your contract)
  • Client meetings
  • Project research
  • Email and phone communications
  • Dealing with outside vendors such as printers
  • Dealing with subcontractors such as illustrators

Calculate the Rate for Your Services

To calculate your rate up to this point, multiply the number of hours needed by your hourly rate. Take note of this number, as it is not your final project rate. You still need to look at expenses and any necessary adjustments.

Add Expenses

Expenses are any additional costs not related directly to your design work or time. Many expenses are fixed rates and should be included in the quote given to your client. However, you may wish to separate the expenses from your estimate to help the client understand the overall fee. Expenses include:

  • Stock photography and illustration
  • Printing costs, including paper
  • Cost of any materials, such as in package design

Adjust as Necessary

Often, adjustments should be made to your rate before presenting an estimate to the client. A small percentage can be added, depending on the size and type of project, for unforeseen changes. This is a judgment call for the designer based on the work. Adding a percentage gives you some breathing room to not charge extra for every little change. As time passes and you estimate more jobs, you can look at the hours worked after the fact and determine if you are quoting properly. This helps you determine if adding a percentage is necessary.

Adjustments may also be made for the type of work you are doing. For example, logo designs are highly valued and may be worth more than just the hours needed to complete the work. The number of prints to be made may also affect your price. An adjustment may be made for the use of the work. An illustration that is used on a website that is accessed by thousands of people is worth more to a client more than one that appears only in the employee newsletter. 

Ask the client if there is a budget for the project. You should still calculate your rate and then determine if you can complete the job within the budget or close to it. If you are way over the budget, you may end up losing the job unless you are willing to lower your price to land the job, which can be done either before you meet with the client or during negotiation.

Negotiating a Design Fee

When you have determined your flat rate, it is time to present it to the client. Inevitably, some try to negotiate. Before going into a negotiation, have two numbers in your head; one is the flat rate and the other is the lowest fee you would accept to complete the job. In some cases, these numbers may be close or the same. When negotiating, evaluate the value of the project to you beyond money. Is it a great portfolio piece? Is there a lot of potential for follow-up work? Does the client have a lot of contacts in your field for possible referrals? While you don’t want to be underpaid and overworked, these factors can affect how much of a percentage you are willing to reduce your price to land the project. As with creating the initial estimate, the experience will help you become a better negotiator.