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Primary formula: expected contribution = ฮฃ(case contribution ร— case probability)

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: No account is required. Tool inputs and results stay in this browser. Anonymous categorical usage analytics send only governed page, tool, cluster and action identifiers; tool inputs and results are never sent. Error monitoring is disabled. Optional saved state stays only on this device.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

What this planner helps you decide

Best for

Service owners choosing between fixed-fee and hourly project billing.

Outputs

Break-even hours, expected fixed/hourly contribution and best, base and worst case outcomes.

Start here

Enter ordered best, base and worst delivery hours, probabilities, both prices, cost and the fixed-fee scope buffer.

Use a different tool when: Do not use this to measure unrecovered scope change; use Scope Creep Impact Planner for that decision. Use this tool to compare fixed-fee and hourly economics.

Quote & capacity

Fixed Price vs Hourly: break-even hours

Break-even hours, expected fixed/hourly contribution and best, base and worst case outcomes.

Amounts use the same currency as your inputs. No currency conversion is performed.

Fixed Price vs Hourly

Compare fixed and hourly contribution across best, base and worst delivery cases. The fixed-fee scope buffer is a revenue mark-up: fixed fee ร— (1 + buffer rate).

Your numbers stay in this browser

currency units

Client rate per hour.

currency units

Fixed-fee option.

currency units

Internal hourly cost.

%

Revenue mark-up for uncertainty, applied as fixed fee ร— (1 + buffer rate).

Upside delivery case.

%

Probability assigned to the upside case.

Expected delivery case.

%

Probability assigned to the base case.

Downside delivery case.

%

Probability assigned to the downside case.

Decision result

Every result is derived by the registered service and project engine.

PDF and CSV exports stay on this device. Clean page links contain no inputs.
Protected Fixed Revenue
7,700.00/project
Break Even Hours
51.33 hours/project
Expected Fixed Contribution
4,693.75/project
Expected Hourly Contribution
3,931.25/project
Fixed-price contribution difference
762.50/project
Best Fixed Contribution
5,425.00/project
Best Hourly Contribution
2,975.00/project
Base Fixed Contribution
4,775.00/project
Base Hourly Contribution
3,825.00/project
Worst Fixed Contribution
3,800.00/project
Worst Hourly Contribution
5,100.00/project

Scenario comparison

Each row names the assumption axis changed from the baseline.

ScenarioResultDifference
Current scenario762.50/projectBaseline
Lower Worst-case hours875.00/project+112.50/project (+14.8%)
Higher Worst-case hours650.00/projectโˆ’112.50/project (โˆ’14.8%)

Save these results, change an input, then compare the updated figures with this baseline.

The baseline is temporary in this tab and is not added to shared scenario links or generated reports.

Calculation details

View calculation detailsView the formulas and inputs used for these results.

Fixed-price contribution difference

Contribution Differencefixed-price contribution โˆ’ hourly contribution762.50/project
Result762.50/project

Reports/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Contribution DifferenceHourly Rate
150
Contribution DifferenceFixed Fee
7,000
Contribution DifferenceDelivery Cost Per Hour
65
Contribution DifferenceScope Buffer Rate
0.1
Contribution DifferenceBest Case Hours
35
Contribution DifferenceBest Case Probability
0.25
Contribution DifferenceBase Case Hours
45
Contribution DifferenceBase Case Probability
0.5
Contribution DifferenceWorst Case Hours
60
Contribution DifferenceWorst Case Probability
0.25

Protected Fixed Revenue

Protected Fixed Revenuefixed fee ร— (1 + scope buffer)7,700/project
Result7,700.00/project

Reports/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Protected Fixed RevenueHourly Rate
150
Protected Fixed RevenueFixed Fee
7,000
Protected Fixed RevenueDelivery Cost Per Hour
65
Protected Fixed RevenueScope Buffer Rate
0.1
Protected Fixed RevenueBest Case Hours
35
Protected Fixed RevenueBest Case Probability
0.25
Protected Fixed RevenueBase Case Hours
45
Protected Fixed RevenueBase Case Probability
0.5
Protected Fixed RevenueWorst Case Hours
60
Protected Fixed RevenueWorst Case Probability
0.25

Break Even Hours

Break Even Hoursprotected fixed revenue รท hourly rate51.33 hours/project
Result51.33 hours/project

Reports hours/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Break Even HoursHourly Rate
150
Break Even HoursFixed Fee
7,000
Break Even HoursDelivery Cost Per Hour
65
Break Even HoursScope Buffer Rate
0.1
Break Even HoursBest Case Hours
35
Break Even HoursBest Case Probability
0.25
Break Even HoursBase Case Hours
45
Break Even HoursBase Case Probability
0.5
Break Even HoursWorst Case Hours
60
Break Even HoursWorst Case Probability
0.25

Expected Fixed Contribution

Expected Fixed Contributionฮฃ(fixed case contribution ร— probability)4,693.75/project
Result4,693.75/project

Reports/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Expected Fixed ContributionHourly Rate
150
Expected Fixed ContributionFixed Fee
7,000
Expected Fixed ContributionDelivery Cost Per Hour
65
Expected Fixed ContributionScope Buffer Rate
0.1
Expected Fixed ContributionBest Case Hours
35
Expected Fixed ContributionBest Case Probability
0.25
Expected Fixed ContributionBase Case Hours
45
Expected Fixed ContributionBase Case Probability
0.5
Expected Fixed ContributionWorst Case Hours
60
Expected Fixed ContributionWorst Case Probability
0.25

Expected Hourly Contribution

Expected Hourly Contributionฮฃ(hourly case contribution ร— probability)3,931.25/project
Result3,931.25/project

Reports/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Expected Hourly ContributionHourly Rate
150
Expected Hourly ContributionFixed Fee
7,000
Expected Hourly ContributionDelivery Cost Per Hour
65
Expected Hourly ContributionScope Buffer Rate
0.1
Expected Hourly ContributionBest Case Hours
35
Expected Hourly ContributionBest Case Probability
0.25
Expected Hourly ContributionBase Case Hours
45
Expected Hourly ContributionBase Case Probability
0.5
Expected Hourly ContributionWorst Case Hours
60
Expected Hourly ContributionWorst Case Probability
0.25

Best Fixed Contribution

Best Fixed Contributionprotected fixed revenue โˆ’ best hours ร— delivery cost5,425/project
Result5,425.00/project

Reports/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Best Fixed ContributionHourly Rate
150
Best Fixed ContributionFixed Fee
7,000
Best Fixed ContributionDelivery Cost Per Hour
65
Best Fixed ContributionScope Buffer Rate
0.1
Best Fixed ContributionBest Case Hours
35
Best Fixed ContributionBest Case Probability
0.25
Best Fixed ContributionBase Case Hours
45
Best Fixed ContributionBase Case Probability
0.5
Best Fixed ContributionWorst Case Hours
60
Best Fixed ContributionWorst Case Probability
0.25

Best Hourly Contribution

Best Hourly Contributionbest hours ร— (hourly rate โˆ’ delivery cost)2,975/project
Result2,975.00/project

Reports/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Best Hourly ContributionHourly Rate
150
Best Hourly ContributionFixed Fee
7,000
Best Hourly ContributionDelivery Cost Per Hour
65
Best Hourly ContributionScope Buffer Rate
0.1
Best Hourly ContributionBest Case Hours
35
Best Hourly ContributionBest Case Probability
0.25
Best Hourly ContributionBase Case Hours
45
Best Hourly ContributionBase Case Probability
0.5
Best Hourly ContributionWorst Case Hours
60
Best Hourly ContributionWorst Case Probability
0.25

Base Fixed Contribution

Base Fixed Contributionprotected fixed revenue โˆ’ base hours ร— delivery cost4,775/project
Result4,775.00/project

Reports/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Base Fixed ContributionHourly Rate
150
Base Fixed ContributionFixed Fee
7,000
Base Fixed ContributionDelivery Cost Per Hour
65
Base Fixed ContributionScope Buffer Rate
0.1
Base Fixed ContributionBest Case Hours
35
Base Fixed ContributionBest Case Probability
0.25
Base Fixed ContributionBase Case Hours
45
Base Fixed ContributionBase Case Probability
0.5
Base Fixed ContributionWorst Case Hours
60
Base Fixed ContributionWorst Case Probability
0.25

Base Hourly Contribution

Base Hourly Contributionbase hours ร— (hourly rate โˆ’ delivery cost)3,825/project
Result3,825.00/project

Reports/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Base Hourly ContributionHourly Rate
150
Base Hourly ContributionFixed Fee
7,000
Base Hourly ContributionDelivery Cost Per Hour
65
Base Hourly ContributionScope Buffer Rate
0.1
Base Hourly ContributionBest Case Hours
35
Base Hourly ContributionBest Case Probability
0.25
Base Hourly ContributionBase Case Hours
45
Base Hourly ContributionBase Case Probability
0.5
Base Hourly ContributionWorst Case Hours
60
Base Hourly ContributionWorst Case Probability
0.25

Worst Fixed Contribution

Worst Fixed Contributionprotected fixed revenue โˆ’ worst hours ร— delivery cost3,800/project
Result3,800.00/project

Reports/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Worst Fixed ContributionHourly Rate
150
Worst Fixed ContributionFixed Fee
7,000
Worst Fixed ContributionDelivery Cost Per Hour
65
Worst Fixed ContributionScope Buffer Rate
0.1
Worst Fixed ContributionBest Case Hours
35
Worst Fixed ContributionBest Case Probability
0.25
Worst Fixed ContributionBase Case Hours
45
Worst Fixed ContributionBase Case Probability
0.5
Worst Fixed ContributionWorst Case Hours
60
Worst Fixed ContributionWorst Case Probability
0.25

Worst Hourly Contribution

Worst Hourly Contributionworst hours ร— (hourly rate โˆ’ delivery cost)5,100/project
Result5,100.00/project

Reports/project from the entered project, capacity and ex-tax commercial assumptions. The engine retains full precision; presentation is bounded for readability.

Fixed Price vs Hourly Planner formulas โ†’
Inputs used by these formula steps
Worst Hourly ContributionHourly Rate
150
Worst Hourly ContributionFixed Fee
7,000
Worst Hourly ContributionDelivery Cost Per Hour
65
Worst Hourly ContributionScope Buffer Rate
0.1
Worst Hourly ContributionBest Case Hours
35
Worst Hourly ContributionBest Case Probability
0.25
Worst Hourly ContributionBase Case Hours
45
Worst Hourly ContributionBase Case Probability
0.5
Worst Hourly ContributionWorst Case Hours
60
Worst Hourly ContributionWorst Case Probability
0.25

Inputs used

Hourly billing rate
150
Fixed project fee
7,000
Delivery cost per hour
65
Fixed-fee scope buffer
0.1
Best-case hours
35
Best-case probability
0.25
Base-case hours
45
Base-case probability
0.5
Worst-case hours
60
Worst-case probability
0.25
Open this calculator with preset values

This calculator supports documented, shareable scenario URLs. Compatible assistants and applications can construct links using the parameters below.

Scenario links contain only allowlisted numeric and closed-choice inputs shown in the URL; Margin101 excludes free text and identifying fields. Anyone you share the URL with can read those numbers, so do not include private or identifying data.

Example: https://margin101.com/tools/fixed-price-vs-hourly/?sv=1&baseCaseHours=45&baseCaseProbability=0.5&bestCaseHours=35&bestCaseProbability=0.25&deliveryCostPerHour=65&fixedFee=7000&hourlyRate=150&scopeBufferRate=0.1&worstCaseHours=60&worstCaseProbability=0.25

ParameterMeaningUnitAllowed valuesPresenceDefault
baseCaseHoursExpected delivery case.hours/project0 to 10000000Required45
baseCaseProbabilityProbability assigned to the base case.decimal probability0 to 0.99Required0.5
bestCaseHoursUpside delivery case.hours/project0 to 10000000Required35
bestCaseProbabilityProbability assigned to the upside case.decimal probability0 to 0.99Required0.25
deliveryCostPerHourInternal hourly cost.currency units/hour0 to 10000000Required65
fixedFeeFixed-fee option.currency units/project0 to 10000000Required7000
hourlyRateClient rate per hour.currency units/hour0 to 10000000Required150
scopeBufferRateRevenue mark-up for uncertainty, applied as fixed fee ร— (1 + buffer rate).proportion of delivery cost added as scope buffer0 to 0.99Required0.1
worstCaseHoursDownside delivery case.hours/project0 to 10000000Required60
worstCaseProbabilityProbability assigned to the downside case.decimal probability0 to 0.99Required0.25

Fixed Price vs Hourly: break-even hours

The fixed price vs hourly result uses only the entered commercial assumptions.

Formula summary

Primary formula
expected contribution = ฮฃ(case contribution ร— case probability)

Read the full methodology

Data used here

  • The estimate uses your inputs and the general business formula documented in the methodology.

Decision checks

Act on the result

Choose the model whose risk allocation matches the scope and contract.

Stress-test the decision

Increase worst-case hours and probability before accepting a fixed fee.

When this estimate can be misleading

  • Results depend on the accuracy and consistent basis of user-entered assumptions.
  • The planner does not forecast demand, delivery performance or contract outcomes.
  • Use the result as educational business decision support, not accounting, tax or legal advice.
  • The fixed price vs hourly result uses only the entered commercial assumptions.

Educational estimate, not advice. See all assumptions & limitations โ†’

Guides to interpret the decision and its assumptions.

Frequently asked questions

How do I compare fixed-fee and hourly economics?

Choose the model whose risk allocation matches the scope and contract.

Which planning assumptions should I stress-test?

Compare a plausible alternative scenario and verify the decision-critical assumption that changes the plan most.