Bad advice, corrected · checked 19 October 2026
On a fixed-price job, every overrun hour comes out of your margin.
If you quote a fixed price, the client's cost is set and your hours aren't. Here is what an overrun does to your hourly rate.
The short version
On a fixed-price job, the client's price is set. Every hour over your estimate comes out of your margin, not their budget.
Say you quote $20,000 for 100 hours. That's $200 an hour. Run 30% over, and it's $154 an hour.
Price fixed jobs with a buffer, and write change orders for anything outside the scope.
In numbers
| Hours worked | Your real hourly rate |
|---|---|
| 100 (as planned) | $200.00 |
| 110 (10% over) | $181.82 |
| 130 (30% over) | $153.85 |
| 150 (50% over) | $133.33 |
Sources
Checked on 19 October 2026.
No law here, just arithmetic: real hourly rate = fixed price ÷ hours worked. Run it on your last fixed-price job.
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