How to Calculate Interior Design Fees (Types of Pricing for Home Projects)

You recently opened your interior design business and you are panicking about how to set a selling price for your services? Or maybe you are a homeowner (or future one) and want to estimate how much an interior design service will cost you?

It’s alright because every starting endeavor faces some challenges. Don’t open up the spreadsheet yet because first you need to understand how pricing works for Interior Designing for homes.

There are a dozen things involved in interior designing fees such as material cost, labor cost, overheads, etc. You charge the clients for the product, service, and labor cost and then you pay your workers for their hard work.

It’s a give-and-take kind of situation, so you need to keep track of how much is coming in and how much is going out.

Don’t forget the cost of printing, sampling, office supplies, business development, website, gas, licenses, travel, phone calls to the clients, and other costs. These are your overheads.

Now that you have an idea of the types of costs involved in a project, let’s talk about how to calculate the fee:

Different Types of Fee Calculating Methods for Interior Design Pros

One thing you need to understand is that when it comes to interior designers, there’s no regulating body. Therefore, there are various types of pricing models and every interior designer chooses the one they can easily work with.

Of course, the fee in each structure varies, which is why customers might find one model acceptable and the other: not so much.

Flat Fee

Also known as fixed fee, this pricing model works on a single rate that you charge for the project. It only includes the price of your time spend on the project and the work you and your workers did.

Any other cost like buying furniture, along with other items, is not included in the final price. Still, you need to spell out in the contract how the flat fee was calculated.

Usually, the fee is dependent on four factors. These include experience, estimated time, square footage, and budget.

Example: You were called in for an interior design consultation. After looking at the house, you consulted with your workers and came up with a fixed fee of $20,000.

Cost-Plus Fee

Also known as markup fee, this pricing model is as simple as the flat fee model. Basically, the designer charges a small markup on the total project cost, which is their fee.

The markup percentage might be different for expensive items such as antiques, rugs, etc. However, if you are charging extra, then this should be mentioned in the contract.

Example: You brought all the furniture and the items from the same retailer for a single project. The total cost of these items was $8,999. You got a designer discount of 40%, which reduced the cost to $5,399.40. Now when charging your client, you add a markup of 35%. This means that your fee will be $7,289.19.

Retail Fee

This fee model is the same as cost-plus fee model but with one small difference. The net price is paid by the designer and the client pays retail. Here, the designer fee differs and you might not receive a set percentage. The change depends on the discount you receive.

Example: The total cost of the items you bought for the client was $8,999. You got a designer discount of 40%, which reduced the cost to $5,399.40. So retail minus designer’s net equals $3599.60.

Hourly Fee

This fee model is pretty self-explanatory. The client pays you for the number of hours you work on the project. Typically, the rates are between $50 and $300, which are dependent on the designer’s talent and experience and the client’s location.

Clients should not go for the cheapest option because it doesn’t guarantee that the project will be completed early. When it comes to the hourly model, you need to charge for every minute that is spent on the project.

This includes emails, phone calls, logistics, ordering, troubleshooting, purchasing and procurement, meetings, shopping, delivery/installation, designing/drafting, driving, sample returns, etc.

Example: $150/hour x 45 hours = $6,750.

Square Footage Fee

As the name says, the designer fee is calculated based on the space. You don’t take in furnishings, fixture or labor cost – just the space you work on. This model is the same as the hourly fee model, only the hours have been replaced by the square footage.

Example: $45/sq. ft. x 3000 sq. ft. = $135,000. 

Percentage of Budget Fee

This fee model is based on the estimate. When you provide the client an estimate of what an interior design project will cost him, you take out a small percentage of that cost and mark it as your fee.

This fee model is just like the flat fee model but does not have a cap. If you feel that the cost might go slightly high than the budget, then inform the client and charge him on installments.

Example: Final Budget: $70,000 x 25% = $49,000.

So there you go – different ways to calculate your interior designer fee as a professional. It’s pretty simple, right? All you need to do is keep a detailed inventory of the direct and indirect costs to your business and you will be easily able to calculate your fee. 

Interior Design Cost for Customers

The sections above discussed how pros charge for their design services, the different fee structures etc.

Now let’s see how much it’s going to cost you as a homeowner when you hire an interior design professional:

As described above, Interior designers use different fee structures to calculate for cost of their services. These different fee structures can make it difficult to compare quotes from different interior designers and determine which service will be offering you the greatest value.

However, comparing the overall cost of a quote as well as the detailed services from each provider can help you choose an interior designer that will meet your needs and fit your budget.

The different types of fee structures include:

1. Flat Rate Cost Estimate

A flat rate is a single figure that an interior designer will charge for one entire project. On average, this cost can range anywhere from $2,000 to $12,000 but can go higher.

On national average, an Interior Design project can cost around $5500.

The interior designer will use their own discretion deciding how much they will charge depending on the scope of the project. The bigger the project, the more they will charge.

Flat rates can often be more expensive than other types of fee structures. It is also important to be wary of additional fees that may be added on at the end of the project.

For example, the interior designer may add an extra fee for a project that runs over time or where they need to go out of their way to satisfy a client.

Be aware of these charges and read the quote and agreement or contract with your interior designer carefully when choosing a flat rate.

2. Hourly Rate Cost Estimate

This fee structure is calculated according to a charge for every hour that the interior designer spends on the project.

Typically, an hourly rate can range anywhere from $50 to $300 or even more. The rate is normally decided relative to the expertise and experience of the interior designer rather than the project.

In other words, you are probably going to pay much more for a celebrity designer than a newbie straight out of design school.

It is important to pay attention to project deadlines when choosing an interior designer that charges an hourly fee.

If the project runs over the proposed deadlines, it can cost much more than anticipated. Also be aware that the hourly rate includes time the designer spends in their office working on the project, shopping for materials or other items, etc. and not just in your home.

It can be difficult to determine exactly how much time was really spent on the project. Some interior designers can use this fee structure to pad an invoice and charge more than the time that they actually put in.

3. Square Footage Rate Cost Estimate

A square footage rate is calculated according to the floor size of the home or room that the interior designer will be working on.

These fees can range anywhere from $5 per sq ft to $12 per sq ft . For example, a property that is 10,000 square feet and the interior design rate is $6 per square foot, will cost $60,000.

This can be a very costly fee structure but also means that there will be no additional charges and there is no room for padding a quote. This is great rate for small homes or single rooms.

4. Percentage Fee Structure Cost Estimate

A percentage fee structure is where the interior designer will charge a percentage of the cost of the entire project over and above this cost. This on average is around 20-25%.

The cost of the project can include building materials, accessories, contractors, etc. This is a good fee structure for the budget conscious homeowner.

However, it does leave room for an interior designer to choose more expensive products and services. It is recommended for a homeowner to select their own contractors and purchase their own building and other materials to bring down the cost of interior design.

Those who are extremely restricted by a budget but would still like to benefit from interior design services should consider remote, online services that are much less costly as they involve far less work for the interior designer.