How to convert a project fee into an hourly rate (and back)

By AMCode. Simple arithmetic to compare fixed fees with hourly billing.

1. Estimate hours for the project, including revisions and calls.
2. Effective hourly rate = project fee / actual hours worked. Track real hours to see it.
3. Fee from a target rate = target rate x estimated hours x buffer (many people add 10-25%).
4. Example: 40 estimated hours x $50 x 1.2 buffer = $2,400 fixed fee.
5. Check afterwards: if you worked 55 hours, your effective rate was $2,400 / 55 = about $43.64.

Logging time even on fixed-fee jobs shows whether your estimates are realistic.

Want it ready-made? The AMCode Freelancer Invoice & Time Tracker () has the formulas set up. This page is general information, not accounting or tax advice.