Fixed Bid vs. Hourly: Which Contract Type Is Right for Your App Project?
One of the first decisions you’ll make when hiring a developer is how you’ll pay them: fixed bid or hourly.
At first glance, a fixed price might seem safer — a known cost with no surprises. But the truth is, each contract type comes with tradeoffs. If you understand them, you can choose the model that protects your investment and supports a productive working relationship.
What’s a Fixed Bid Contract?
In a fixed bid agreement, the freelancer agrees to complete a deliverable (like an entire app or a feature set) for a set price.
This might be:
A flat rate for the full project
A series of milestone payments tied to phases or features
It sounds simple — and predictable. But…
“Fixed bids are only as solid as the details behind them.”
Cons of Fixed Bid
Requires detailed specs from the start
Encourages cost padding for risk mitigation (e.g., a $10K project may be bid at $12K+)
Minor changes = formal “change requests” = delays
Developers may cut corners or go silent if the project becomes unprofitable
“A fixed bid often trades cost predictability for project inflexibility.”
What’s an Hourly Contract?
An hourly contract means the freelancer is paid for the time they work. You set a weekly hours cap (if desired), and they track actual time against tasks.
It’s flexible and transparent — great for iterative builds and ongoing collaboration. But it requires trust, diligent communication, and strong project management.
Pros of Hourly
Easier to adjust the scope on the fly
Cost is built from actual time on task
Ideal for agile, evolving projects
No need for formal change requests or detailed upfront specifications
Cons of Hourly
Unchecked hours can blow the budget
Requires close time tracking and trust
Less predictability unless milestones and caps are defined
“Hourly only works when expectations, estimates, and reporting are clear.”
Which Should You Choose?
Use these guidelines:
Choose Fixed Bid If:
Your feature list is clearly defined
You don’t anticipate much iteration
You’re comfortable with slower turnarounds due to change processes
Choose Hourly If:
You’re still shaping the product
You value collaboration and iteration
You want to evolve quickly without hitting scope walls
You want to track costs more granularly
💡 Pro tip: You can blend both approaches: a fixed bid for initial scoping or MVP setup, then hourly for ongoing feature development and iterations.
My Recommendation as a Developer
Most app projects — especially MVPs or first-time builds — change as they evolve. In my experience, a structured hourly contract with:
Weekly time caps
Transparent reporting
Clear weekly goals
provides the best balance of flexibility and budget control.
But if you’ve got tight specs, limited funds, or external pressure for defined deliverables, a fixed bid can work well — if you put in the effort to create detailed specifications.
Need Help Choosing or Scoping?
I’ve worked on both contract types across 100+ client projects. If you’re unsure which fits your budget, risk tolerance, and goals — let’s talk through it.