Fixed-price contracts for virtual assistant work require accurate hour estimation even when you’re not billing hourly.
The difference between a profitable project and an unprofitable one comes down to how well you calculated the time required upfront.
While you’re pricing by the project, you still need to estimate the actual hours required to complete the work.
Break Down the Project Into Specific Tasks
Start by listing every task the project requires.
A “social media management” project might include content creation, scheduling posts, responding to comments, analytics reporting, and client communication. Each task gets its own time estimate.
The Government Procurement Policy Board (GPPB) requires deliverable documentation in government contracts to include estimated time for each task.
This same principle applies to VA work. Without breaking down the project, you’re guessing.
Estimate Time Based on Historical Data
If you’ve done similar work before, use your actual time records. Check how long previous projects took and adjust for differences in scope or complexity.
For new types of work, research industry standards or run a small test. Complete one task and track how long it takes, then multiply by the total number of similar tasks.
Be realistic. Factor in your actual working pace, not an ideal scenario. Include time for revisions, clarifications with the client, and administrative tasks like file organization or status updates.
Add Buffer Time for Revisions and Delays
Every project needs buffer time. Client feedback takes time to incorporate. Questions require back-and-forth communication. Technical issues happen.
Buffer time guidelines based on project type:
- Standard projects with clear requirements: Add 15-20% buffer
- Projects with multiple stakeholders or revision rounds: Add 25-30% buffer
- New client relationships or unclear initial scope: Add 30-40% buffer
Calculate the Fixed Price From Total Hours
Once you have your total estimated hours including buffer time, multiply by your hourly rate to get the fixed price.
If the project requires 40 hours and your rate is $15/hour, the fixed price is $600. If you need to hit a specific project price instead, divide that price by your hours to see what effective rate you’re earning.
This tells you whether the project makes financial sense. Document this calculation.
When clients ask how you arrived at your price, you can explain the breakdown instead of appearing arbitrary.
Handle Scope Changes With Pro-Rated Adjustments
If a client adds new deliverables mid-project, calculate the additional hours required and adjust the price proportionally.
Create a simple change order process:
- Client requests something outside original scope
- Estimate the additional hours required
- Calculate the additional cost
- Get written approval before proceeding
This protects both parties and maintains clear expectations. For partial completion situations, pro-rated pay should reflect the proportion of agreed deliverables completed.
If you completed 60% of the project deliverables, you’ve earned 60% of the fixed price.
Understanding Pro-Rated Pay for Partial Work Periods
Pro-rated pay applies when a VA works less than a full billing cycle or completes only part of a contracted period. This commonly happens with mid-month starts.
Calculate pro-rated pay using this method:
- Divide the total fixed price by the total number of deliverables or milestones
- Multiply by the number of deliverables actually completed
- For time-based pro-rating, divide monthly compensation by standard workdays (typically 22) and multiply by days actually worked
For example, if a fixed-price contract is $1,200 for 12 blog posts delivered over one month, and the VA completes 8 posts before the contract ends early, the pro-rated payment is $800.
Review and Adjust Your Estimation Process
After each fixed-price project, compare your estimated hours to actual hours worked. Calculate your variance percentage. If you consistently underestimate or overestimate by more than 20%, adjust your estimation method.
Common estimation errors include forgetting administrative time, underestimating revision rounds, and assuming uninterrupted work time. Build these lessons into your next estimate.
The International Labour Organization emphasizes that output-based contracts benefit from periodic review against outcomes and flexibility to adjust pricing models. Your estimation process should improve with each project.
Fixed-price work offers predictability for both clients and VAs, but only when the underlying hour estimates are accurate. Take the time to estimate properly, document your work, and adjust as you learn. The math matters.
Frequently Asked Questions
What happens if a fixed-price project takes longer than estimated?
If you underestimated the hours, you’re generally obligated to complete the agreed deliverables at the fixed price. This is why buffer time is critical. However, if the client changes the scope or adds requirements beyond the original agreement, you can negotiate additional compensation.
How do you calculate pro-rated pay if a VA contract ends early?
Divide the total fixed price by the number of agreed deliverables, then multiply by the deliverables actually completed. For time-based contracts, divide the monthly amount by 22 workdays and multiply by days worked.
Should VAs track time on fixed-price projects?
Yes. Even though you’re not billing hourly, tracking actual time helps you see if your estimates were accurate, improve future pricing, and comply with DOLE record-keeping requirements. Keep a simple log of hours spent per task. This data protects you in payment disputes and helps you price similar projects correctly going forward.