Interior Designers's Fee Structure Options

When hiring an interior designer, one of the first things you’ll discuss is how they charge for their services. Designers use different fee structures depending on the scope, complexity, and other factors of the project. Common options include:

☑️Hourly Fees – Designer bills by the hour, provides flexibility but unpredictable total cost. Rates based on experience and location.

☑️Retainer Fee – Upfront payment to reserve designer’s services, usually 15-30% of total expected fee.

☑️Flat or Per Room Fee – Some designers charge fixed rate for the entire project or per room. Provides cost certainty but less flexibility.

☑️Percentage of Budget – For large projects, designer fee may be a percent, like 10-20%, tied to the total furniture/construction budget.

Understanding the common pricing models can help you evaluate bids and find the right fit. This guide covers the main ways interior designers price their time and expertise.

Hourly Fees

Many designers—especially for smaller residential projects—bill by the hour. Rates range based on:

  • Years of experience
  • Designer’s credentials
  • Geographic location

Hourly billing provides flexibility to adapt to the project’s needs. But the final cost is less predictable upfront.

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A budget-friendly service by Tallbox.

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Retainer Fee

A retainer is an upfront payment, typically 15-30% of the expected total fee. This reserves the designer’s services and covers initial planning stages.

Retainers verify the client is serious and offsets early costs before actual design work begins. Remaining fees are billed as the project progresses.

How do retainers work for designers?

Retainers are a standard practice used by many interior designers to secure client commitments and help cover initial costs. Here’s a more detailed overview of how retainers typically work:

What is a Retainer Fee?

  • An upfront payment, usually 30% of the total estimated project cost, that a client pays to reserve the designer’s time/services

Key Attributes:

  • Due when client first engages the designer and signs contract
  • Covers initial meetings, conceptual sketches, project planning stages
  • Credited toward final balance owed, but typically non-refundable
  • Larger retainers may be needed for more extensive projects

Why Designers Require Retainers:

  • Reserves their time so they can allocate adequate resources
  • Confirms client is serious and committed before investing effort
  • Offsets early costs incurred even before actual designing begins
  • Provides some payment security in case client decides not to proceed

From the Client Perspective:

  • Big upfront outlay can feel burdensome
  • Stings if project ends up getting cancelled and retainer is forfeited
  • Uncertainty on total project cost when initially paid

While retainers represent a cost for clients upfront, they help set clear expectations and ensure designers get compensated for initial work in case projects fall through. For designers, retainers provide assurance that clients are invested so they can efficiently allocate their time.

Flat or Per Room Fee

Some designers quote a fixed, flat project fee after assessing the scope. Others charge per room for residential remodels.

This provides cost certainty upfront but less flexibility if needs change. Extra fees may apply for additions/expansions in scope.

Percentage of Budget

For large-scale projects, designers may charge a percent fee tied directly to the total furniture/construction budget. Common percentages range from 10-20%.

As the budget increases or decreases, so does the designer’s fee. This aligns incentives to stay on budget.

Key Considerations

A candle sits on a table next to a flower.
A candle sits on a table next to a flower.

When evaluating different fee structures, keep the following in mind:

  • Clearly defined scope of work
  • Designer’s experience level
  • Expected project duration
  • Inclusions, exclusions, and limitations
  • Billing schedule, payment terms
  • Pricing transparency and fair market rates

Discussing fees upfront ensures proper expectations and budgeting. Be wary of rates that seem too low or high compared to the work involved.

Interior design fee structure explainer

Hourly rate fee

A chair with a vase and books on it.
A chair with a vase and books on it.

To deliver quality results interior designers need to charge for their services often as retainer.

The the most common range  is $50-$150+ per hour, as rates do tend to vary based on factors like the designer’s location, years of experience, expertise, portfolio and if full-service design. Some additional details on hourly rates.

  • Junior designers or those just starting out often charge around $50-75 per hour.
  • Established designers with 5-10 years experience typically charge $100-150 per hour. 
  • Top tier designers or those with 10+ years experience can charge $150-200+ per hour.
  • Rates also depend on where the designer is located. Big cities like NYC or LA will be higher.
  • Some designers may offer discounted hourly rates for certain types of project

The benefits of hourly rates are that the cost directly correlates with the time spent and designers only charge for work being done. The downside is the final total is harder to predict upfront.

Setting a “not to exceed” amount can help control costs. Overall, hourly billing offers a flexible and fair structure for interior design services.

What is a retainer fee in interior design

A retainer fee is an upfront payment interior designers require from clients before starting a new project. It’s a way to reserve the designer’s time and services.

Retainers are a standard industry practice and help offset initial costs incurred in the early stages of the design process.

Key Facts About Retainer Fees

  • Typically around 30% of the total estimated project cost
  • Due when client signs contract to initiate services
  • Non-refundable but credited toward final amount owed
  • Helps cover initial meetings, conceptual sketches, planning
  • Larger retainers may be needed for extensive projects

“The retainer fee provides us assurance that a client is committed so we can allocate time and resources to their project effectively.”

A wooden chair and a vase in a room.
A wooden chair and a vase in a room.

Why Designers Require Retainer Fees (day rate)

There are several key reasons retainers are useful for designers:

  • Reserves the designer’s time – They avoid taking multiple projects only to have some cancel later
  • Verifies client is serious – Prevents tire kickers who won’t ultimately move forward
  • Covers initial costs -concepts, meetings, project initiation require effort upfront before design even starts
  • Provides payment security – Ensures designer gets compensated for early work if client decides not to proceed later

The Client Perspective

While retainers provide advantages for designers, it can feel burdensome from the client side:

  • Big upfront cost – Having to pay a chunk of money before seeing any results
  • Non-refundable policy – No guarantee you’ll recoup the retainer if the project falls through
  • Uncertainty on total cost – The final project fees are still an estimate when retainer is paid

However, retainers ultimately protect both parties if used appropriately. They confirm mutual commitment and allow the design process to kickoff smoothly.

Flat project fees

Charging a flat project fee upfront is another common billing method for interior designers. With this model:

  • The designer quotes one fixed price for the entire project scope after assessing the client’s needs.
  • This provides a high level of cost predictability for the client.
  • The fee is typically paid upfront before work begins.
  • The project scope and deliverables are clearly defined.
  • If additional work is needed, it may require a contract amendment and extra fees.

The benefits of flat fees include the ability to budget accurately and avoid hourly cost overruns.

The downside is that an extensive project may end up costing the designer more time than anticipated if the scope was underestimated initially.

Overall, flat fees work best for well-defined project scopes without too many unknowns/variables.

It shifts the risk to the designer to complete the work within the time allotted for the fixed price. Some designers may start with an hourly structure and switch to a flat fee later on for more certainty.

Percentage based of total project cost

Charging a percentage of the total project cost is a third option some interior designers use for billing. With this model:

  • The designer’s fee is directly tied as a percentage of the total project budget.
  • Typical percentages range from 10-20%, with 15% being common.
  • This covers the designer’s services and overhead costs.
  • As the project budget increases or decreases, so does the designer’s fee.
  • The percentage is often applied to the furniture/fixture purchases.

The main advantage of using a percentage is it scales the fee appropriately to the size and scope of the job. The designer shares a stake in staying under budget.

Potential downsides are that the client has to estimate the project cost upfront, and the fee may exceed hours actually worked if the budget is high. Overall, a percentage fee aligns incentives and is easiest for large-scale projects with significant budgets.

Per Room Design Fees

Charging interior design fees on a per room basis is a pricing model some designers use, especially for residential projects. But how exactly does it work? Here’s what clients should understand about per room fees:

The Basics

  • Designers quote a fixed price per room upfront
  • The fee covers standard services for that room’s design
  • More rooms = higher total fee

“We find per room pricing provides clarity for homeowners doing a full house remodel.”

How do interior designers charge for furniture?

Interior designers typically charge for furniture in one of two main ways:

  1. Markup on Retail Price The most common method is to charge a markup on the retail price of the furniture pieces specified for the project. The markup amount varies, but is often 30-50%.

For example, if a sofa has a retail price of $2,000, the designer may charge the client $2,600-$3,000 for it. This covers the cost for them to purchase, handle delivery logistics, and provides profit margin.

  1. Separate Furniture Procurement Fees
    Some designers charge an additional fee specifically for the time and effort spent on furniture buying tasks instead of or in addition to retail markups. Common procurement fees range from 10-20% of the total furniture budget.

This might be a $1,000 furniture procurement fee on a $10,000 furniture purchase budget. This can increase transparency on margins for clients.

Additional fees for custom pieces or rare vintage sourcing may also apply. Any special payment terms are typically outlined in the project contract.

Retail product markups and dedicated procurement fees allow designers to recover costs and get compensated for their furniture purchasing services, which can be very time intensive. Defined expectations set both parties up for success.

What's Included Per Room

The standard per room fee typically covers:

  • Consultations to understand goals
  • Space planning and furniture layouts
  • Specifying finishes, lighting, furnishings
  • Design drawings like floor plans and elevations
  • Materials selection and sourcing

When Per Room Works Best

But keep in mind additional fees may apply for:

  • Architectural or structural changes
  • Custom millwork or special features
  • Managing construction/installation
  • Sourcing rare or specialty items
  • Travel beyond local area

What's Not Included

Ideal for:

  • Whole home remodels doing multiple rooms
  • Clients wanting cost predictability upfront
  • Focused redesigns of select key rooms

Per room pricing provides an easy way to budget design fees, but confirm scope inclusions/exclusions first.

Payment schedule Fees

Retainer upfront

Many designers require a retainer before starting work, typically 30% of projected fees. This reserves their time.

Requiring a retainer upfront is a standard policy for most interior designers before starting a new project. Some key points:

  • The retainer is usually around 30% of the estimated total fees.
  • It reserves the designer’s time and services for the client’s project.
  • It covers initial costs like consultations, planning, concept sketches.
  • Retainers are typically non-refundable but credited toward the final fees.
  • The remaining balance is billed throughout the project lifespan.
  • A higher retainer may be required for larger projects.

The benefits of retainers are that they ensure the designer gets paid for their time and avoids clients who aren’t serious. It also establishes a commitment.

Some downsides are the upfront costs for clients. To ease this, designers may allow payment plans for the retainer amount. Overall, retainers provide assurance and allow work to begin for both parties.

Progress payments

Remaining fees are billed at project milestones or monthly as work is completed.

progress payments are a typical billing method for interior designers after the initial retainer. Key details on progress payments:

  • The remaining fees after the retainer are split into intervals and billed periodically.
  • Common intervals are monthly, by project phase, or at major milestones.
  • Progress bills account for work completed in the previous period.
  • Phases may include schematics, design development, construction documentation, procurement, installation, etc.
  • Allows clients to pay for work incrementally rather than upfront.
  • Designers issue detailed invoices each period for transparency.

The benefit of progress payments is workflow and costs are distributed evenly over the project. Downside is more frequent client billing.

Overall, progress payments effectively align payment with work completed, keeping cash flow steady for the designer while breaking up costs for clients. It prevents large lump sums being due.

Final payment upon project completion

Clients pay remainder of fees at the end of the project before receiving final drawings/plans.

Requiring final payment upon completion before releasing final plans and drawings is standard practice for interior designers. Key points:

  • The last 10-20% of the total fee is often due at the end when the project is finished.
  • This helps ensure all outstanding balances and additional fees are paid.
  • Designers will typically not provide the final plans, CAD files, schematics, or any other project documentation until paid in full.
  • Finished drawings are only handed over once final payment is received.
  • For large projects, final payment may be due before installation begins.
  • Outstanding permit or other fees may also need to be settled.

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The benefit is this gives the designer assurance of payment before releasing their work product.

The downside for clients is the last payment may seem larger if spread out over fewer installments. Overall, final payment protects the designer and incentivizes timely completion.

How to split big budget interior design?

Here are some tips for breaking up payments on a large interior design budget:

  1. Require a retainer fee upfront when contracting services. Typically 30%, this reserves the designer’s time. Remainder is split into progress payments.
  2. Bill in phases tied to the design process – bill at end of schematics, design development, construction documentation, etc. each with clear deliverables.
  3. Set progress payments based on intervals like monthly or quarterly. Designer bills as work is completed each period.
  4. Have larger payments coincide with big milestone events vs spread evenly. Ex: 15% upon initial concepts, 30% after final drawings, 40% on installation.
  5. Break payments across disciplines. Bill separately for architectural work, MEP engineering, permitting fees as those services are rendered.
  6. Use a payment scheduler tool allowing you to customize billing intervals and installments. Automates sending reminder invoices.

The key is aligning payments to work done rather than arbitrary dates. Have more frequent installments of smaller amounts versus large lump sums. This keeps cash flow steady for the designer while easing burden on client by spreading payments out. Mutual commitment is still required.