Short answer: every fee model is a bet on your hours. Hourly bills the hours you work; flat, percent of cost, per square foot and product margin all fix the fee up front and leave scope creep with you. Count the hours, price in the overrun you expect, and compare what each model earns per hour. The calculator does it for a project and for your past work.
Everything below is arithmetic on invented numbers. The hours, rates and budgets are illustrative, not market rates, not a fee survey and not advice. Replace them with your own tracked numbers.
The arithmetic
Baseline hours: design hours + site visits x hours each + items to source x minutes each + meetings x hours each.
Expected hours: baseline x (1 + overrun). Overrun is the part nobody quotes: revisions, delayed deliveries, a client who changes the sofa.
Effective hourly = what the fee model bills / expected hours. Hourly bills your rate x hours less any write-off, so overrun does not lower it.
The fee you need for a target is expected hours x target. The walk-away fee is expected hours x a floor rate (a share of your target).
A fixed fee can absorb overrun only until fee / target runs out of hours: that is its break-even overrun.
A worked project
40 design hours, 4 site visits of 2.5 hours, 60 items at 25 minutes each, 6 meetings of an hour, 25 percent expected overrun and a $100.00 target. Client project cost $40,000.00, $30,000.00 bought through you, 1,500 square feet.
To earn $100.00 an hour you need $10,125.00; walk away below $7,593.75.
Hourly at $125.00 with 10 percent written off bills $11,390.63: $112.50 an hour, whatever the overrun.
Flat fee of $8,500.00: $83.95 an hour, $69.96 at 50 percent overrun, and it can absorb only 4.9% overrun before dropping under target.
20 percent of project cost is $8,000.00: $79.01 an hour, already under target with no overrun at all.
$6.00 a square foot is $9,000.00: $88.89 an hour, absorbing 11.1% overrun.
A 25 percent product margin is $7,500.00: $74.07 an hour, because the procurement hours are unpaid.
A $3,500.00 design fee plus 18 percent margin is $8,900.00: $87.90 an hour, absorbing 9.9%.
The same project is a $112.50-an-hour job or a $74.07-an-hour job depending only on how it is billed. The models that look largest on the proposal are not the ones that pay best once hours overrun.
A worked history
Eight finished projects, $56,800.00 in fees for 655 hours: blended $86.72 an hour against a $100.00 target.
Five of eight earned under target; the shortfall to target across them is $10,700.00.
By model: hybrid $118.18, hourly $112.50, per square foot $102.86, flat $79.84, percent $79.31 and product-margin-only $59.62 an hour.
The lowest project is a primary suite paid on margin alone: $3,100.00 for 52 hours.
What to feed it
Hours you actually tracked, including sourcing, order chasing and calls, not the hours you billed or budgeted.
An overrun you have seen on your own past projects, and a worse one for the stress case.
Your target hourly rate, which only you can set.
Your contract, scope, local licensing rules and what a client will accept come first. This is arithmetic, not a view on what a client should pay.
Questions
How do I choose an interior design fee structure?
Count the hours the project takes you, add the overrun you expect, and divide what each fee model would bill by those hours. On the worked project, with 81 baseline hours and 25 percent overrun, the hourly model earns $112.50 an hour and a $8,500.00 flat fee earns $83.95.
Why does a flat or percentage fee lose money on scope creep?
Because the fee stays fixed while your hours grow. The $8,500.00 flat fee on the worked project can absorb only 4.9 percent overrun before it drops under a $100.00 target; at 50 percent overrun it earns $69.96 an hour.
How do I know which fee model has paid me best?
Divide each past project's fee by the hours you really spent and group by fee model. On the worked history of eight projects, hybrid fees earned $118.18 an hour and product-margin-only earned $59.62.