Mixed Rates (Hybrid Billing)
Overview
Mixed rates combine hourly and fixed-rate billing within the same project. Get the best of both worlds: predictable pricing for defined deliverables, flexible billing for variable work.
Why mixed rates:
Flexibility - Fixed for scope, hourly for extras- Risk balance - Client and vendor share risk
- Clear boundaries - Defined scope + overflow work
- Client confidence - Core deliverables priced upfront
- Fair billing - Pay fixed for outcome, hourly for changes
Common scenarios:
- Website (fixed) + ongoing maintenance (hourly)
- Core features (fixed) + custom requests (hourly)
- Design phase (fixed) + implementation (hourly)
- Base retainer (fixed) + overflow work (hourly)
Mixed Rate Structures
Structure 1: Core Fixed + Extras Hourly
Most common hybrid model.
Example: Website Development
Project: Corporate Website Redesign
FIXED COMPONENT (€8,000):
- Homepage design & development
- 5 inner pages (About, Services, Contact, Team, Blog)
- Responsive design
- Contact form integration
- Basic SEO setup
- 2 revision rounds
- Testing & launch
HOURLY COMPONENT (€75/hour):
- Additional pages: €75/hour
- Custom features: €75/hour
- Content updates: €75/hour
- Extra revisions (after 2nd): €75/hour
- Training sessions: €75/hour
- Post-launch support: €75/hour
Timeline:
- Fixed component: 6 weeks
- Hourly work: As requested
Payment:
- Fixed: 50% upfront, 50% on launch
- Hourly: Monthly invoices
Configuration in CADENSA:
┌─────────────────────────────────────────┐
│ Project: Corporate Website │
│ Pricing Type: Mixed (Hybrid) │
├─────────────────────────────────────────┤
│ │
│ Fixed Component: │
│ Amount: [€8,000.00] │
│ Deliverables: [See scope doc...] │
│ │
│ Hourly Component: │
│ Default Rate: [€75.00] per hour │
│ Applies To: │
│ ☑ Additional features │
│ ☑ Scope changes │
│ ☑ Extra revisions │
│ ☑ Post-launch support │
│ │
│ Tasks: │
│ 1. [Fixed] Core Website €8,000 │
│ 2. [Hourly] Additional Work €75/h │
│ 3. [Hourly] Support €75/h │
│ │
│ [Save Project] │
└─────────────────────────────────────────┘
Structure 2: Phase-Based Hybrid
Different billing per project phase.
Example: Software Development
Project: Custom CRM System
PHASE 1: DISCOVERY & DESIGN (Hourly)
- Requirements gathering: €100/hour
- Wireframes & mockups: €100/hour
- Technical architecture: €100/hour
Estimate: 40 hours (~€4,000)
(Billed hourly - actual time)
PHASE 2: CORE DEVELOPMENT (Fixed)
- User management module: €5,000
- Contact management: €8,000
- Deal pipeline: €7,000
- Reporting dashboard: €6,000
Total Fixed: €26,000
(Flat fee regardless of time)
PHASE 3: CUSTOMIZATIONS (Hourly)
- Custom integrations: €125/hour
- Additional features: €125/hour
- Third-party APIs: €125/hour
(Client decides scope, pays per hour)
PHASE 4: MAINTENANCE (Monthly Fixed)
- Ongoing support: €1,500/month
- Bug fixes included
- Security updates
(Fixed monthly retainer)
Configuration:
Project Phases:
Phase 1: Discovery (Hourly)
├─ Task: Requirements [Hourly: €100/h]
├─ Task: Wireframes [Hourly: €100/h]
└─ Task: Architecture [Hourly: €100/h]
Phase 2: Core Build (Fixed)
├─ Task: User Management [Fixed: €5,000]
├─ Task: Contacts [Fixed: €8,000]
├─ Task: Pipeline [Fixed: €7,000]
└─ Task: Reporting [Fixed: €6,000]
Phase 3: Custom (Hourly)
├─ Task: Integrations [Hourly: €125/h]
└─ Task: Features [Hourly: €125/h]
Phase 4: Maintenance (Monthly)
└─ Retainer: €1,500/month [Fixed Monthly]
Structure 3: Base Retainer + Overflow
Fixed monthly base + hourly overflow.
Example: Marketing Agency
Monthly Retainer: Mixed Rate
BASE RETAINER (€3,000/month fixed):
Included Services:
- Social media management (3 platforms)
- 8 content posts per month
- Monthly analytics report
- 1 strategy call (1 hour)
- Email support (response within 24h)
Approximate Hours: 20 hours/month
(€150/hour effective rate if maxed)
OVERFLOW WORK (€150/hour):
When base retainer exceeded:
- Additional posts: €150/hour
- Ad campaign setup: €150/hour
- Extra strategy calls: €150/hour
- Content creation: €150/hour
- Video editing: €150/hour
Tracking:
- Hours tracked for all work
- First 20h/month: Covered by retainer
- Hours 21+: Billed at €150/hour
Example Month:
- Total Hours: 28 hours
- Base Retainer: €3,000 (covers 20h)
- Overflow: 8h × €150 = €1,200
- Total Invoice: €4,200
Configuration:
┌─────────────────────────────────────────┐ │ Monthly Retainer - Mixed Billing │ ├─────────────────────────────────────────┤ │ │ │ Base Retainer: │ │ Amount: [€3,000.00] per month │ │ Includes: [20] hours │ │ Effective Rate: €150/hour │ │ │ │ Overflow Rate: │ │ Rate: [€150.00] per hour │ │ Applies: After 20 hours used │ │ │ │ Billing Cycle: │ │ ● Monthly (1st of month) │ │ ○ Bi-weekly │ │ │ │ Auto-Invoice: │ │ ☑ Base retainer (always) │ │ ☑ Overflow hours (if any) │ │ │ │ Hour Tracking Dashboard: │ │ ┌────────────────────────────────────┐ │ │ │ January 2026 │ │ │ │ Used: 17h / 20h (85%) │ │ │ │ Remaining: 3h │ │ │ │ Overflow: 0h │ │ │ │ Status: ✓ Within retainer │ │ │ └────────────────────────────────────┘ │ │ │ │ [Save Settings] │ └─────────────────────────────────────────┘
Structure 4: Deliverable + T&M
Fixed deliverables + Time & Materials.
Example: Product Development
Project: Mobile App Development
DELIVERABLES (Fixed Price):
- Deliverable 1: User Authentication €2,500
- Deliverable 2: Profile Management €3,000
- Deliverable 3: Core Feature Alpha €8,000
- Deliverable 4: Beta Testing €2,000
- Deliverable 5: App Store Launch €1,500
Total Deliverables: €17,000
TIME & MATERIALS (Hourly):
- Bug fixes (post-deliverable): €100/hour
- Feature enhancements: €100/hour
- UI/UX improvements: €100/hour
- Performance optimization: €100/hour
- Client-requested changes: €100/hour
Rules:
- Deliverables: Fixed price, paid on acceptance
- T&M Work: Requires client approval before starting
- T&M Cap: €2,000/month max (without special approval)
Task-Level Mixed Rates (ENTERPRISE)
Mixing Rate Types in Tasks
Different tasks = different billing methods.
Project Setup:
Project: E-commerce Website
Tasks by Rate Type:
FIXED TASKS:
1. Homepage Design €1,200 [Fixed]
2. Product Page Template €800 [Fixed]
3. Shopping Cart €2,500 [Fixed]
4. Checkout Flow €3,000 [Fixed]
5. Payment Integration €1,500 [Fixed]
HOURLY TASKS:
6. Product Uploads €50/h [Hourly]
7. Custom Product Filters €75/h [Hourly]
8. Third-party Integrations €100/h [Hourly]
9. Content Migration €60/h [Hourly]
10. Testing & Bug Fixes €75/h [Hourly]
Total Fixed: €9,000
Hourly Estimate: 60h × avg €70/h = €4,200
Total Estimate: ~€13,200
Task Configuration:
Task: Shopping Cart
┌─────────────────────────────────────────┐
│ Rate Type: ● Fixed Fee │
│ ○ Hourly Rate │
│ │
│ Fixed Amount: [€2,500.00] │
│ │
│ Deliverable: │
│ - Add to cart functionality │
│ - Cart editing (quantity, remove) │
│ - Cart persistence (session) │
│ - Discount code input │
│ - Tax calculation │
│ │
│ Est. Hours: [25h] (€100/h effective) │
└─────────────────────────────────────────┘
Task: Product Uploads
┌─────────────────────────────────────────┐
│ Rate Type: ○ Fixed Fee │
│ ● Hourly Rate │
│ │
│ Hourly Rate: [€50.00] per hour │
│ │
│ Description: │
│ Upload client-provided product data │
│ to e-commerce platform. Pricing based │
│ on actual time (variable quantity). │
│ │
│ Est. Hours: [20-30h] (depends on qty) │
└─────────────────────────────────────────┘
Billing & Invoicing
Separate Line Items
Invoice with mixed rates clearly separated.
Invoice Example:
┌─────────────────────────────────────────┐
│ INVOICE #INV-2026-0055 │
│ Date: Jan 25, 2026 │
│ Project: Corporate Website │
├─────────────────────────────────────────┤
│ │
│ FIXED-PRICE DELIVERABLES: │
│ │
│ Core Website Development €8,000.00 │
│ (Milestone 2 of 2) │
│ │
│ ───────────────────────────────────── │
│ │
│ HOURLY WORK: │
│ │
│ Additional Pages │
│ - Team Bios Page 3.5h @ €75 €262.50 │
│ - Case Studies 5.0h @ €75 €375.00 │
│ │
│ Custom Features │
│ - Newsletter Modal 2.5h @ €75 €187.50 │
│ - Live Chat Setup 4.0h @ €75 €300.00 │
│ │
│ Extra Revisions │
│ - Homepage Round 3 3.0h @ €75 €225.00 │
│ │
│ Subtotal Hourly: 18h €1,350.00 │
│ │
│ ───────────────────────────────────── │
│ │
│ Subtotal: €9,350.00 │
│ Tax (20%): €1,870.00 │
│ ═════════════════════════════════════ │
│ TOTAL DUE: €11,220.00 │
│ │
│ Payment Terms: Net 15 │
│ Due Date: Feb 9, 2026 │
└─────────────────────────────────────────┘
Invoice breakdown clarity:
- Fixed component: Lump sum with description
- Hourly component: Detailed time log per task
- Clear separation for client understanding
- Combined total for payment
Partial Payments
Payment schedule for mixed projects.
Example Payment Schedule:
Project: €13,200 Total (€9,000 fixed + ~€4,200 hourly)
Payment Schedule:
Invoice 1: Project Start
- Fixed Deposit (30%): €2,700
- Due: Upon contract signing
- Date: Jan 5, 2026
- Status: Paid
Invoice 2: Design Approval
- Fixed Progress (30%): €2,700
- Hourly Work (Jan): €850
- Subtotal: €3,550
- Due: Jan 31, 2026
- Status: Paid
Invoice 3: Development Complete
- Fixed Progress (30%): €2,700
- Hourly Work (Feb): €1,200
- Subtotal: €3,900
- Due: Feb 28, 2026
- Status: ⏳ Pending
Invoice 4: Launch
- Fixed Final (10%): €900
- Hourly Work (Mar): €2,150
- Subtotal: €3,050
- Due: Mar 31, 2026
- Status: 📝 Not sent
Total: €13,200 Paid: €6,250 Remaining: €6,950
Budget Tracking
Mixed Budget Dashboard
Track both fixed and hourly components.
Dashboard View:
┌─────────────────────────────────────────┐ │ Project: Corporate Website │ │ Budget Overview │ ├─────────────────────────────────────────┤ │ │ │ FIXED COMPONENT: │ │ ┌────────────────────────────────────┐ │ │ │ Budget: €8,000 (fixed) │ │ │ │ Billed: €8,000 (100%) │ │ │ │ Status: ✓ Complete │ │ │ │ │ │ │ │ Time Spent: 92 hours │ │ │ │ Effective Rate: €86.96/hour │ │ │ │ Target Rate: €100/hour │ │ │ │ Margin: -13% (over budget 12h) │ │ │ └────────────────────────────────────┘ │ │ │ │ HOURLY COMPONENT: │ │ ┌────────────────────────────────────┐ │ │ │ Estimate: €4,200 (60h @ €70/h) │ │ │ │ Actual: €1,350 (18h @ €75/h) │ │ │ │ Remaining: ~€2,850 (~42h) │ │ │ │ Status: 📊 32% used │ │ │ │ │ │ │ │ Breakdown: │ │ │ │ - Additional Pages: 8.5h €637 │ │ │ │ - Custom Features: 6.5h €487 │ │ │ │ - Extra Revisions: 3.0h €225 │ │ │ └────────────────────────────────────┘ │ │ │ │ TOTAL PROJECT: │ │ Budget: ~€12,200 │ │ Billed: €9,350 (77%) │ │ Projected: €12,500 (103%) │ │ Slightly over estimate │ │ │ └─────────────────────────────────────────┘
Client Communication
Scope Clarity
Document what's fixed vs. hourly.
Scope Document Template:
PROJECT SCOPE DOCUMENT Corporate Website Redesign
════════════════════════════════════════
FIXED-PRICE COMPONENT: €8,000
This fixed price includes:
Homepage
- Hero section with custom graphics
- Services overview (3 columns)
- Client testimonials (carousel)
- Call-to-action section
5 Inner Pages
- About Us (team photos, company history)
- Services (detailed service descriptions)
- Contact (form, map, office info)
- Team (staff bios, photos)
- Blog (listing + detail page template)
Technical Implementation
- Responsive design (mobile/tablet/desktop)
- Contact form with email notifications
- Blog CMS integration
- Basic SEO (meta tags, sitemap)
- Google Analytics setup
Revisions
- 2 rounds of revisions included
- Each round: Up to 10 change requests
- Requested within 5 days of delivery
Testing & Launch
- Cross-browser testing (Chrome, Firefox, Safari)
- Mobile device testing
- Launch to production server
════════════════════════════════════════
HOURLY-RATE COMPONENT: €75/hour
The following are NOT included in fixed price and will be billed hourly:
Additional Pages (beyond 5)
- Each additional page: ~3-5 hours @ €75/h
- Estimate: €225-375 per page
Custom Features
- Live chat integration: ~4h @ €75/h
- Newsletter signup modal: ~2.5h @ €75/h
- Member login area: ~12h @ €75/h
- E-commerce: Separate quote
Extra Revisions (beyond 2 rounds)
- Round 3+: Hourly rate applies
- Major redesigns: Hourly rate
Content Updates
- Writing new copy: €75/h
- Image sourcing/editing: €75/h
- Updating existing pages: €75/h
Training & Support
- CMS training session: 2h @ €75/h
- Post-launch support: €75/h
- Maintenance retainer: See separate quote
════════════════════════════════════════
CHANGE ORDER PROCESS:
Any work beyond fixed scope requires:
- Written change request from client
- Time & cost estimate from us
- Client approval before work begins
- Hourly billing at €75/hour
════════════════════════════════════════
ESTIMATED TOTAL:
Fixed Component: €8,000 Estimated Hourly: €1,500 (20h) ────── Estimated Total: €9,500
(Actual hourly charges based on work requested)
Client Signature: ____________ Date: ______
Agency Signature: ____________ Date: ______
Change Order Process
Managing scope changes in mixed projects.
Change Order Form:
┌─────────────────────────────────────────┐
│ CHANGE ORDER #CO-2026-003 │
│ Project: Corporate Website │
│ Date: Jan 20, 2026 │
├─────────────────────────────────────────┤
│ │
│ REQUEST: │
│ Add "Case Studies" page with filterable │
│ project gallery (by industry, service). │
│ │
│ SCOPE ANALYSIS: │
│ This is outside fixed-price scope. │
│ Original scope: 5 pages (defined) │
│ This request: Additional page (#6) │
│ │
│ ESTIMATE: │
│ │
│ Design: 3h @ €75/h │
│ - Gallery layout │
│ - Filter UI design │
│ │
│ Development: 5h @ €75/h │
│ - Filterable gallery code │
│ - Case study template │
│ - Admin interface │
│ │
│ Testing: 1h @ €75/h │
│ │
│ Total Hours: 9 hours │
│ Total Cost: €675.00 │
│ │
│ TIMELINE IMPACT: │
│ +3 business days │
│ │
│ CLIENT APPROVAL: │
│ ☐ Approved - Proceed with work │
│ ☐ Declined - Continue with original │
│ ☐ Revise estimate (see notes) │
│ │
│ Notes: _____________________________ │
│ _____________________________________ │
│ │
│ Signature: ____________ Date: ______ │
│ │
└─────────────────────────────────────────┘
Best Practices
Do's
- Document scope meticulously - What's fixed vs. hourly
- Use change orders - Formal approval for hourly work
- Set hourly estimates - Guide client expectations
- Track all time - Even on fixed components (for analysis)
- Invoice frequently - Monthly for hourly work
- Communicate proactively - "This is outside scope, will be hourly"
- Set hourly caps - Max €X/month without approval
- Separate invoices - Or clearly separated line items
- Use task-level rates - Different tasks, different billing (ENTERPRISE)
- Review monthly - Fixed vs. hourly spending review with client
Don'ts
- Don't blur boundaries - Clear fixed/hourly distinction
- Don't assume scope - "I thought X was included"
- Don't do hourly work without approval - Always get OK first
- Don't surprise clients - Unexpected hourly charges damage trust
- Don't mix deliverables - Fixed task ≠ hourly work
- Don't waive hourly charges - "I'll throw this in" sets bad precedent
- Don't forget to track - Even 15-minute tasks add up
- Don't underbid fixed - Or you'll lose on that component
Profitability Analysis
Comparing Fixed vs. Hourly
Which component was more profitable?
Project Retrospective:
┌─────────────────────────────────────────┐
│ Project Profitability Report │
│ Corporate Website - Post-Completion │
├─────────────────────────────────────────┤
│ │
│ FIXED COMPONENT: │
│ Revenue: €8,000 │
│ Time Spent: 92 hours │
│ Cost (labor): €5,125 (mixed rates) │
│ Profit: €2,875 │
│ Margin: 35.9% │
│ Effective Rate: €86.96/hour │
│ Assessment: Profitable │
│ │
│ HOURLY COMPONENT: │
│ Revenue: €2,250 (30h @ €75) │
│ Time Spent: 30 hours │
│ Cost (labor): €1,650 (avg €55/h) │
│ Profit: €600 │
│ Margin: 26.7% │
│ Effective Rate: €75/hour (as billed) │
│ Assessment: Profitable │
│ │
│ TOTAL PROJECT: │
│ Revenue: €10,250 │
│ Cost: €6,775 │
│ Profit: €3,475 │
│ Margin: 33.9% │
│ │
│ INSIGHTS: │
│ • Fixed component over budget by 12h │
│ but still profitable (36% margin) │
│ • Hourly component exactly as expected │
│ (no scope creep, clear boundaries) │
│ • Client satisfied, willing to refer │
│ │
│ LEARNINGS FOR NEXT TIME: │
│ • Budget 100h for similar fixed scope │
│ (was 80h, actually took 92h) │
│ • Hourly work well-controlled with │
│ change order process │
│ • Overall: Successful mixed approach │
│ │
└─────────────────────────────────────────┘
Examples
Example 1: Web Development Hybrid
Scenario: Small business website with ongoing updates
Structure:
PROJECT: Business Website + Maintenance
Phase 1: Initial Build (Fixed)
Price: €5,000
- Design + Development
- 7 pages
- Contact forms
- Basic SEO
Timeline: 6 weeks
Phase 2: Monthly Maintenance (Mixed)
Base: €500/month (includes up to 3 hours)
Overflow: €100/hour (for hours 4+)
Example Months:
- Month 1: 2h used → Invoice: €500 (base only)
- Month 2: 5h used → Invoice: €700 (€500 + 2h × €100)
- Month 3: 1h used → Invoice: €500 (base only)
Example 2: Software Development
Scenario: Custom application with phased delivery
Structure:
PROJECT: Inventory Management System
Core Modules (Fixed):
- User Management: €3,000
- Product Catalog: €5,000
- Order Processing: €7,000
- Reporting Dashboard: €4,000
Total Fixed: €19,000
Customizations (Hourly):
- Custom integrations: €125/hour
- Additional features: €125/hour
- Third-party APIs: €125/hour
Example billing:
Q1: Fixed modules (€19,000) + 40h custom (€5,000) = €24,000
Q2: 60h custom work (€7,500) = €7,500
Example 3: Marketing Retainer
Scenario: Base services + overflow projects
Structure:
RETAINER: Marketing Support
Base Package: €4,000/month (fixed)
Includes:
- Social media (4 platforms, 12 posts)
- Email newsletter (2 per month)
- Monthly analytics report
- 1 strategy call
Add-On Services: Hourly
- Video production: €200/hour
- Ad campaign setup: €150/hour
- Landing page design: €150/hour
- Copywriting: €120/hour
Example Month:
- Base retainer: €4,000
- Video (8h @ €200): €1,600
- Ad setup (3h @ €150): €450
Total: €6,050
Troubleshooting
Scope confusion
Problem: Client thinks hourly work is included in fixed price.
Solution:
Prevention:
1. Detailed scope document (see template above)
2. Explicit exclusions list
3. Client signature on scope
4. Change order process
Handling:
1. Reference original scope document
2. Show where item is listed as "hourly"
3. Provide estimate before proceeding
4. Get approval in writing
Too much hourly work
Problem: Hourly component ballooning beyond estimate.
Solution:
Set Caps:
- Max €X/month without approval
- Require approval for work >5 hours
- Monthly review of hourly spending
Communication:
"You've used 15 hours this month (€1,125).
Original estimate was 20h total. Continue?"
Adjustment:
- Renegotiate fixed scope
- Convert frequent hourly tasks to fixed add-on
- Reduce hourly rate for volume
Next Steps
- Rate Management → - Understanding rate hierarchy
- Hourly Rates → - Time-based billing details
- Fixed Rates → - Flat-fee pricing guide
- Project Budgets → - Budget tracking
- Invoices → - Creating invoices
Need Help?
- Email: support@cadensa.io
- Community: community.cadensa.io
- FAQ: Mixed Rates FAQ