Often people ask about the fees involved with hiring an interior designer for their project. How much would it cost to hire a designer? Is their designer over-charging them? Any question regarding design fees cannot easily be answered because each project is unique, as is each client, each designer, and each design firm.
However, there are five ways in which interior designers can charge:
1) Hourly fee. This is dreaded by many clients, and understandably so. Are we talking 20 hours or 35 hours? That's a huge difference in the total amount. Some designers (and other service providers too) are willing to set a "cap" on the total dollar amount, or total number of hours. But before signing an agreement with a cap, you must make sure you know what will happen when the maximum is reached. Will your designer consider it "case closed", or will (s)he just not bill for the balance of time spent on your project? An hourly fee is more fair for everyone when it is used for consultations rather than complete design services.
2) Percentage-based agreements. For a percentage-based agreement, the designer will charge you a certain percentage of the total budget of your project. The agreement should be clear as to what would happen should you increase your budget, or decide to decrease it for whatever reason.
3) Commission-based agreements. Very similar to percentage-based, but rather than being a percentage of the total budget, it is a percentage of the costs of the items specified and/or purchased for your project. It is most common to see this type of billing on decorating projects, or used in combination with another fee structure.
4) Fee based on square footage. This is most commonly used for larger non-residential projects. Usually designers/firms have pre-established dollar-per-square foot rates for the different phases and types of work that could be requested of them. This method of billing is never used for basic residential projects because the work and time involved is similar for a tiny and a larger washroom or even kitchen!
5) Fixed-fee contracts. These are often preferred by clients (and by our office). Aside from the obvious benefit of taking the guesswork out of how many hours you might be billed for, it is usually based on the designer's experienced estimate of hours required, size of the space, budget, and other factors all averaged out.
Payment schedules are another issue often discussed. This is when and how much you will be paying your designer. It is common practice for a designer or firm to request a deposit or retainer fee on signing of the agreement or contract. A retainer should not be requested for services such as a two-hour consultation, and a retainer should be around 15% of the total design fee, although I have often heard of designers requesting as much as 50% up-front.
Different designers have different billing methods or habits. Some bill every other week, while others bill weekly or monthly. I like the idea of billing as phases have been completed; not only does this give the clients the confidence that they are paying for services rendered, but it helps illustrate how the total amount of the contract was reached. When the designer's work is completed, the balance should be paid in full unless other terms have been agreed upon.
To roughly estimate how much the design fee for your project could be, calculate 10% to 15% of your total budget. This is not necessarily accurate, but it's the best guideline anyone can provide without seeing what is involved. Of course, if your budget is unrealistic, the number you arrive at will be far from accurate. And designers are known to charge anywhere from 10% of the total budget all the way up to 30%. But, that doesn't necessarily mean that it will cost you that much -- your designer should be passing trade-discounts on to you unless otherwise stated in the agreement. (The code of ethics states that the designer is not supposed to be making money off the project that the client is unaware of.) On a recent project Idealspace Design handled, the design fee was approximately $1500, but only added about $250 to the total budget because the discounts (compared to regular retail prices) totaled a bit over $1200.
It is impossible to make suggestions about hourly rates because an independent designer just starting out will charge a lot less than a larger firm that has been established for many years. Keep in mind that hiring a beginner, charging $25 per hour, might require 20 hours to do something that a more experienced designer will only require half the time to accomplish. In that case, paying $60 per hour only costs $100 more at the end.
No matter the fee structure or payment schedule, you should feel comfortable with the amount you are going to be paying your designer. Some designers are also willing to work on a consultation basis even for do-it-yourselfers, so no matter your budget, it is possible to enlist the help of a qualified interior designer.