How Much to Charge for Interior Design: Hourly, Flat or Percentage
To work out how much to charge for interior design, start with two numbers that belong to you: the hourly floor your year needs, and the hours the project will take. Multiply them and you have the least the project can pay. Only then pick a fee structure (hourly, flat, per square foot, percentage of budget or cost-plus) and check what it pays per hour. In the illustrative example below the floor is $83.33 a billable hour, a 3-room project takes 126.5 hours, and so it has to bring in at least $10,541.25 however it is billed.
None of these figures are market rates. The income, costs, hours, rates, markup and budget belong to one made-up designer. Replace each one with your own before you quote.
The interior design fee formula
revenue needed = income to keep / (1 - tax set-aside) + business costs
billable hours = hours a week x billable share x weeks worked
hourly floor = revenue needed / billable hours
project floor = hourly floor x project hours
any fee = pays the floor if fee / project hours >= hourly floor
The same floor method is laid out for any self-employed trade in the freelance hourly rate calculator.
Step 1: the hourly floor
The example designer wants to keep $60,000 a year, sets aside 25% of profit for tax, and spends $12,000 a year running the business: software, insurance, a studio, a samples library, marketing. The designer works 40 hours a week for 46 weeks, and can bill 60% of them. The rest is proposals, admin, marketing and unpaid follow-up.
| Line | Amount |
|---|---|
| Income to keep a year | $60,000 |
| Profit before a 25% tax set-aside | $80,000.00 |
| Business costs a year | $12,000 |
| Revenue needed a year | $92,000.00 |
| Billable hours: 40 a week x 60% billable x 46 weeks | 1,104 |
| Hourly floor | $83.33 |
Every billable hour has to earn $83.33. If every hour were billable the floor would be $50.00; the difference is the 736 unbilled hours a year. Spread over all the hours worked, the designer keeps $32.61 an hour. That is why a rate picked from “what I want to make an hour” comes out short: the clients pay for 1,104 hours, and the year has to be paid from those.
Step 2: the hours the project takes
Estimate by room and by phase, then add the work that belongs to the whole project. The example is 3 rooms at 28 hours each, plus 26 project-wide hours, plus a 15% contingency for what cannot be seen yet at the quoting stage.
| Work | Hours |
|---|---|
| Concept, 6 a room x 3 rooms | 18 |
| Design development, 10 a room x 3 rooms | 30 |
| Sourcing and ordering, 8 a room x 3 rooms | 24 |
| Install and styling, 4 a room x 3 rooms | 12 |
| Discovery and brief | 6 |
| Client meetings, 8 x 1.5 h | 12 |
| Site visits, 4 x 2 h | 8 |
| Contingency, 15% | 16.5 |
| Total project hours | 126.5 |
| At the $83.33 floor | $10,541.25 |
Your own time records are the only good source for these hours. If you have none yet, log the next project phase by phase so the next quote starts from real hours.
Step 3: hourly vs flat vs per square foot vs percentage vs cost-plus
Here is the same 126.5-hour project billed five ways. The hours do not change with the fee structure. Only what they pay does.
| Structure | How it is figured | Fee | Per project hour |
|---|---|---|---|
| Hourly | 126.5 h x $95 | $12,017.50 | $95.00 |
| Flat fee | quoted for the project | $12,000.00 | $94.86 |
| Per square foot | 1,800 sq ft x $7.00 | $12,600.00 | $99.60 |
| Percentage of budget | 14% of $80,000 | $11,200.00 | $88.54 |
| Cost-plus | 25% on $45,000 of furnishings + $3,000 design fee | $14,250.00 | $112.65 |
Every structure clears the $83.33 floor on this project, but they are $3,050.00 apart, and they react to different things:
- Hourly at $95 pays $12,017.50 because it follows the hours. If the project runs long, the fee runs long with it.
- Flat fee at $12,000 pays $94.86 an hour only if the hours estimate holds. Every hour over the estimate comes out of your rate.
- Per square foot at $7.00 over 1,800 square feet pays $12,600.00. It follows the floor area, not the design work, so a small room full of detail can pay less than a large plain one.
- Percentage of budget at 14% of $80,000 pays $11,200.00. It follows the client’s spending, not your hours.
- Cost-plus pays the most here, $14,250.00: a 25% markup on $45,000 of furnishings ($11,250.00) plus a $3,000 design fee. It depends on the client ordering through you. Markup is a share of your cost, not of the selling price; the markup vs margin chart shows the difference.
What happens when the budget shrinks
Say the client trims both the budget and the furnishings order by 25% (an illustrative cut) while the design work stays the same. The percentage fee drops to $8,400.00, which is $66.40 per project hour, below the $83.33 floor. Cost-plus drops to $11,437.50 and still clears it here, because the design fee does not move. Any fee tied to the client’s spending needs a minimum written into the agreement, worked out from your hours.
How much to charge for an interior design consultation
A consultation is a small project with its own hours. The example consultation is 90 minutes with the client, plus prep, notes and travel: 4.5 hours in all, and 30 miles at the designer’s own $0.40 a mile. At the floor that is $386.99, priced at $400 after rounding up.
The designer credits 50% of the consultation ($200) toward the project when a client signs, so the $12,000 fee becomes $11,800. That credit is a discount, and it has a cost. If 40% of consultations turn into projects, each consultation keeps $320.00 once credits are allowed for, $66.99 under its own floor. A credit can still be worth giving, but set it knowing what it costs, and raise the consultation price if it has to cover the credit too.
The insight: scope creep is where a flat fee loses money
The flat fee in the example pays $94.86 an hour, comfortably above the floor, on the hours it was built from. Now the client asks for 4 revision rounds where the agreement includes 2, and adds a room after the quote. At 5 hours a round, the extra rounds are 10 hours; the added room is another 28. That is 38 hours the quote never counted.
Billed as a change order at $95 an hour, those hours are $3,610.00. Absorbed into the flat fee, they drop it to $72.95 an hour, $10.38 below the floor. The project goes from paying the year to being paid for by it.
Two things protect a flat or percentage fee: a stated number of revision rounds with a per-round price after that, and a change order for any room or item added after the quote. Both only work if they are in writing before the work starts. If you are setting rates for other creative work, the same scope logic runs through how much to charge for a website.
How these were calculated
Revenue needed is income / (1 - tax set-aside) + business costs. Billable hours are hours a week x billable share x weeks; the floor is revenue / billable hours, rounded to the cent before use. Project hours are hours per phase x rooms, plus discovery, meetings x hours each and site visits x hours each, plus the contingency share. Each fee is computed from its own inputs and divided by the project hours to give a per-hour figure. The consultation floor is (minutes / 60 + prep + notes + travel hours) x floor + miles x cost per mile, rounded up to the next $25; kept per consultation is the price less the conversion share times the credit. Scope creep hours are extra rounds x hours per round plus added rooms x hours per room. Every figure was computed twice, once by the code behind the product below and once by an independent program, and the two agree to the cent. The budget cut is this post’s own illustrative input. All inputs are illustrative, not market rates or measured hours. The tax set-aside is a share you choose, not a computed tax. Sales tax, trade discounts and contract terms are not modeled. None of this is financial, legal or tax advice.
To run this on your own year, rooms and rates, the pack below has the same calculators linked together, plus a retainer and payment schedule and a project profitability check once the job is done.