Hourly Rates
Hourly rates are often a safe bet, because you will be compensated for all your time worked. There is no danger of giving the client a flat rate and then losing money when hours run high. Even with an hourly rate, the client is going to want an estimate of the project cost.
Estimates
An estimate gives the client an idea of the project cost while still allowing you to work by the hour. Consider providing a range, as to not lock yourself down to an exact cost for the project, and clearly spell out what work that estimate includes. When working by the hour, but with an estimate, it’s a good idea to always keep the client informed of your progress, and to let them know when you are approaching the higher end of your estimate. If you are going to go over, explain why and discuss alternatives.
Flat Rates
The main benefit of a flat rate quote is the guaranteed rate for you and your client. You will know exactly what you are making on a project, and that can often help with projecting your income and planning ahead. Your client will also know what they are spending, and this will of course put them at ease and allow them to plan their budget. Be careful when providing a flat rate, as you don’t want to get stuck in endless rounds of revisions or unexpected meetings that take you well beyond your projected hours. Your agreement should be clear about what is included in the flat rate, and even with that, you may want to consider a cap on hours for various parts of the project.
Payment Schedules
Payment schedules are often beneficial, especially for large projects as opposed to ongoing work or small updates. A payment schedule can keep a project on track by charging a percentage of the project for work completed. It can also be based on dates, such as a portion of a flat rate due at the start of each month during the course of a project. It’s a good idea to work in a down-payment, so you are getting something up-front, especially when dealing with new clients. When doing ongoing work for clients, it is common to bill them monthly for work rather than waiting for a specific task to be completed, but always discuss this with clients at the start of work.
Rush Fees
Graphic designers may choose to charge a rush fee for deadlines that are not considered “usual” or reasonable. Whether or not to charge a rush fee may depend on your current schedule, the scope of the work requested, and your relationship with the client.
Retainers
Working on a retainer is a good way to get paid up-front, at a fixed rate, while still working by the hour. A retainer agreement will often give the client a discounted hourly rate that gives them a certain number of hours for a given time period. The benefit to you is the pre-paid, monthly (or quarterly, or yearly, etc) income, and the client gets more of your time for less money.