Fixed Price or Hourly: Buying Software Work

Who carries the risk in each model

Under a fixed price the supplier estimates the work, adds a margin for what might go wrong and commits to the result. If the job takes longer, the supplier absorbs it. If it goes faster, the supplier keeps the difference. You pay for certainty, and you get it only for the scope written down. Anything outside that scope becomes a change request.

Under hourly billing, usually called löpande räkning in Swedish contracts, you pay for the hours worked at an agreed rate. There is no built-in margin for risk, so the rate can look lower, but the total is open. Your protection comes from control: frequent reporting, small deliveries and the right to stop.

Projects that suit a fixed price

A fixed price works when the supplier has built the same kind of thing many times and the variables are known. The estimate is then based on experience rather than guesswork, and the risk margin stays small.

• Company websites with a known number of pages, such as our business website package.
• Landing pages for a single offer or campaign.
• Webshops on Shopify or WooCommerce with a standard checkout, Klarna and Swish.
• A defined integration between two systems with documented APIs, for example forms into a CRM.
• Audits and reviews with a clear deliverable, such as a written report with a prioritised fix list.

The common factor is that you can write the acceptance criteria before work starts. If you can say what done looks like, a supplier can price it. Published package prices, listed on our pricing page, are the extreme version: the scope and price are known before the first conversation.

Projects that suit hourly billing

Hourly billing fits work where the next step depends on what the previous step revealed. A supplier forced to fix a price on such work will either add a large margin or cut corners when the budget runs out. Paying by the hour is then more honest and often cheaper in total.

• Troubleshooting an old system nobody has documented.
• Continuous improvement of a live product, one small change at a time.
• Early product development where features change after each round of user feedback.
• Support and maintenance with unpredictable volume.
• Work inside a client's own team, where the client directs the priorities day to day.

If you choose hourly, insist on three controls in the agreement: a weekly or fortnightly report of hours per task, an estimate before each larger task, and a written approval threshold above which the supplier must ask before continuing.

Change requests under both models

Changes are where the two models feel most different. Under a fixed price, every change outside the written scope needs its own quote, and a loose scope description leads to arguments about what was included. Under hourly billing, changes are simply more hours, which is flexible but makes it easy to drift without noticing.

Our guide to change requests and scope creep shows how to run that log without it turning into a conflict.

Hybrid models: capped and phased

Many projects are partly known and partly not. Two hybrids handle that well. A capped model (takpris) bills hours but promises a ceiling for a defined scope; if the ceiling is reached, the supplier finishes the agreed scope at its own cost or stops and asks. A phased model splits the work: a short fixed-price discovery phase produces a specification, and the build is then priced as a fixed job against that specification.

Phasing is usually the best choice for a new app or MVP. The discovery phase is small, so the risk is small, and it produces exactly the document you need to get comparable quotes for the build, from us or from anyone else. When you compare the answers, our method for comparing web agency quotes keeps the scope aligned.

When not to buy fixed-price work from us: if your project is mainly about untangling an existing system with unknown code, a fixed price would force us to add a margin you should not have to pay. Hourly work with a clear cap, from a supplier who knows that system, is the better deal. If you are unsure which situation you are in, a short call usually settles it.

Frequently asked questions