How it’s calculated
Fixed price = (estimated hours × your hourly rate), plus a risk/complexity buffer and a revisions buffer (each a % of that base labor), plus a profit margin on the subtotal. The buffers compensate for scope creep, revisions, and estimation error — the things that turn "two weeks" into five.
base = hours × rate subtotal = base + risk% × base + revisions% × base quote = subtotal × (1 + margin%)
Worked example
80 estimated hours at $120/hour with a 15% risk buffer, a 10% revisions buffer, and a 12% profit margin.
- Base labor: $9,600
- Risk $1,440 + revisions $960 + margin $1,440
- Fixed quote: $13,440 — a $3,840 cushion over base
- Effective rate if the estimate holds: $168/hour
What’s a good number?
Common combined buffers: 15–20% for well-defined work with a familiar client, 25–40% for vague scope, new clients, or fixed deadlines. If you've never tracked estimate vs. actual, start at 25%.