Fixed price, price estimate or hourly rate?

In brief

• Fixed price: You pay the agreed price for the work described.
• Maximum price: The final price must not exceed the agreed limit for the defined work.
• Price estimate: The final price can normally not exceed the estimate by more than 15 percent.
• Hourly rate: You pay for the time spent, materials and agreed extras.
• No price agreement: You normally pay the usual price for equivalent work, or what is otherwise reasonable.

Whatever the pricing model, you need to agree on how additional work, materials mark-up, mileage and other costs will be handled.

What is the difference?

No pricing model is always best. The right model depends on the size of the project, the risk and how well the work can be described in advance.

What is a fixed price?

A fixed price means the parties agree on one specific price for a defined piece of work.

Example:

Complete painting of walls and ceilings in the living room and hallway: 48,000 kr including VAT, materials, masking and clean-up.

If the work is carried out as agreed, this is normally the price the customer pays. The fact that the tradesperson spent more hours than expected does not in itself give a right to increase the fixed price.

In the same way, the customer can normally not demand a lower price just because the tradesperson finished the work faster than expected.

Advantages of a fixed price

• You know the cost before the work starts
• It is easier to budget
• The tradesperson is responsible for their own time estimate
• You do not need to check every single hour worked
• There is less risk of arguments about hours logged
• Quotes from several companies are easier to compare

Disadvantages of a fixed price

• The tradesperson may build in a risk margin
• The price may be higher than with efficient hourly work
• An unclear job description can lead to many extras
• Changes along the way can be expensive
• A fixed price can give a false sense of security if it is unclear what it includes

A fixed price works best when the work can be inspected and described before it starts.

That might be, for example:

A fixed price does not mean everything is included

A fixed price covers the work that is actually described in the agreement.

If the agreement says "paint the living room walls", the price does not necessarily include:

What matters is therefore not just that the words "fixed price" appear in the quote. The scope of work must be clear.

Example

You have agreed a fixed price of 150,000 kr to renovate a kitchen. After demolition, extensive rot damage is discovered in the floor that was not visible beforehand.

If repairing the rot damage is not covered by the job description, this may be additional work. The tradesperson cannot simply add the cost to the final invoice. As a main rule, you must be contacted, informed about the work and approve the addition.

What is a maximum price?

A maximum price, also called a highest price or price cap, is an agreed upper limit.

Example:

The work is invoiced based on time spent and materials, but the total price for the work described must not exceed 85,000 kr including VAT.

If the actual cost comes to 72,000 kr, you pay 72,000 kr. If the calculation comes to 92,000 kr, you normally pay no more than the maximum price for the work the price cap covers.

This is what sets a maximum price apart from a fixed price:

Be precise about what the maximum price covers

The agreement should state whether the maximum price includes:

A price cap on the main work does not necessarily prevent extras for work the customer orders later. If you want an absolute cap for the whole project, it must be stated clearly.

What is a price estimate?

A price estimate is the tradesperson's assessment of what the work will probably cost.

It is more binding than a loose price indication, but not as strict as a fixed price or a maximum price.

Under the Consumer Craftsman Services Act (håndverkertjenesteloven), the price under a price estimate should normally not exceed the stated amount significantly, and in any case not by more than 15 percent.

There are exceptions if:

How the 15 percent rule works

If the tradesperson gives a price estimate of 100,000 kr, the usual upper limit is:

100,000 kr + 15 percent = 115,000 kr

This does not mean the tradesperson can automatically add 15 percent. The customer pays the correct price for the work, but 15 percent is normally the outer limit for exceeding the price estimate itself.

If the work actually cost 104,000 kr, the tradesperson can invoice 104,000 kr. The tradesperson cannot simply send an invoice for 115,000 kr just because the Act allows a certain overrun.

Price estimate with approved additional work

Suppose you receive a price estimate of 100,000 kr. Along the way, you order documented additional work for 20,000 kr.

The main job and the additional work must then be assessed separately:

Depending on the circumstances, the total invoice may then be higher than 115,000 kr because the additional work was not part of the original estimate.

The tradesperson must be able to show that the work really was an addition and not something that was already included.

What is a price indication?

A price indication is a looser and less binding assessment than a price estimate.

Examples might be:

The problem is that it is not always clear whether the tradesperson has given a binding estimate or just a preliminary indication.

The Consumer Craftsman Services Act says that in the event of disagreement, the service provider must substantiate whether a price statement was:

So avoid verbal phrases like "roughly", "about" or "it won't be that much".

Ask the tradesperson to state clearly in writing which pricing model applies.

What is an hourly rate?

With an hourly rate, you pay for the time the tradesperson actually spends, plus materials and other agreed costs.

Example:

Advantages of an hourly rate

• You pay for the work actually performed
• It can be inexpensive for small and simple jobs
• The tradesperson does not need to build in a large risk margin
• The model suits situations where it is hard to know what needs to be done
• The customer can more easily change priorities along the way

Disadvantages of an hourly rate

• The final price is more uncertain
• The customer carries more of the risk of low efficiency
• There may be disputes about the number of hours
• Mileage, purchasing and administration may be charged on top
• Poor planning can be expensive
• Several employees may work at the same time without the customer being prepared for the cost

An hourly rate is often suitable for:

An hourly rate without an estimate of hours is risky

An agreed hourly rate of 1,000 kr says little about what the project will cost.

The work costs 20,000 kr if it takes 20 hours, but 100,000 kr if it takes 100 hours.

So ask for:

A good wording could be:

The work is invoiced based on time spent at 1,050 kr per hour including VAT. The tradesperson estimates 35 to 45 working hours and must contact the customer in writing before 45 hours are exceeded. The total cost must not exceed 60,000 kr without written approval.

What happens if you do not agree on a price?

If the price does not follow from the agreement, the Consumer Craftsman Services Act says it should normally be calculated in the usual way for equivalent services at the time the agreement was made.

This is often referred to as the going rate (gjengs pris).

If there is no clear going rate, the customer pays what is reasonable based on, among other things:

A dispute is harder to handle when no price has been agreed. So always ask for a written price or calculation method before the work starts.

Should the price include VAT?

Prices quoted to private customers must, as a main rule, include VAT and public charges.

The Consumer Craftsman Services Act also says that a price statement is deemed to include VAT and public charges, unless it must be assumed that the consumer knew the tax was not included.

Still, ask for the quote to state expressly:

All prices are stated including VAT.

That reduces the risk of a price of 200,000 kr suddenly being presented as 250,000 kr at invoicing.

Materials, mark-ups and other costs

The hourly rate is rarely the whole bill.

Clarify how the following will be calculated:

Materials mark-up

The tradesperson may have an agreed mark-up on materials. The mark-up can cover ordering, transport, storage, warranty liability and risk.

It should state:

Do not compare the tradesperson's materials price directly with a random online price without checking the product, delivery, warranty and what is included.

How is additional work handled?

Additional work is work that is not covered by the original job, but which it is practical to carry out together with the main work.

The main rule is that the tradesperson must contact the customer before the additional work is carried out.

A written change quote should describe:

Example of a good change agreement

After demolition, rot has been discovered in two floor joists. Replacing the joists was not included in the original fixed price. The work is carried out for a fixed additional price of 18,500 kr including VAT. Completion is pushed back by two working days. The customer approves the additional work before it starts.

The phrase "we'll sort it out" is not a good change agreement.

Can the tradesperson do additional work without approval?

There are some exceptions.

If the customer cannot be reached, the tradesperson may, depending on the circumstances, carry out minor additional work if it is reasonable to assume the customer wants the work done, and the price is insignificant or low compared with the main job.

The tradesperson must also, to a reasonable extent, carry out work that cannot be postponed without risk of significant damage or loss.

These exceptions do not give the tradesperson a general right to carry out large additions without contacting the customer.

What if the tradesperson discovers the price will be much higher?

The tradesperson should give notice when it becomes clear that the final price may be significantly higher than the customer had reason to expect.

Such a notice should not just say:

"This is going to be a bit more expensive."

It should state:

The customer must get a real opportunity to stop, reduce or change the work before large new costs are incurred.

What works best for different types of jobs?

Bathroom renovation

A fixed price or a combined model can work well when the bathroom has been inspected and drawn up and the products have been chosen.

A practical model could be:

Renovating an older home

Here the risk of hidden conditions is greater.

A good solution could be:

Painting

A fixed price is often a good fit when the rooms can be inspected and it is clear how much filling and preparation is needed.

If the surface is unknown, the agreement should describe what counts as normal preparation and how larger repairs are priced.

Electrician and plumber

An hourly rate can work for smaller service jobs and troubleshooting.

For larger installations, you should ask for:

Carpentry and minor repairs

An hourly rate can be appropriate when the customer wants flexibility. For clearly defined tasks, such as fitting specific doors, a fixed price can be simpler.

Full apartment renovation

A combined model is often the most realistic:

The combined model often gives the best balance

Many larger renovation projects do not fit perfectly into just one pricing model.

Example:

Fixed price for the main work described: 350,000 kr including VAT. Any additional work is carried out only after written approval. Agreed hourly rate for approved additions: 1,050 kr including VAT. Materials mark-up: 12 percent. The tradesperson must give notice before the total project cost exceeds 380,000 kr. No work that would cause this limit to be exceeded may be carried out without written approval.

The customer gets predictability on the main work, while the tradesperson avoids having to price all the uncertainty into the fixed price.

How to compare the quotes

Do not just compare the total.

Make a table where you check:

A quote of 300,000 kr can be more expensive than a quote of 330,000 kr if the cheaper one has major reservations and leaves out important trades.

Ask for an itemised invoice

You can demand a bill that makes it possible to assess the nature and extent of the work and the materials used.

When the work was not done at a fixed price, the invoice must also show how the price was calculated. Additional charges must be stated separately.

With an hourly rate, the invoice or its attachment should show:

Feel free to ask for weekly timesheets. That way, questions can be cleared up while the work is in progress.

How the payment should be split

For larger jobs, it is often better to pay by milestones than to pay the whole amount up front.

An example:

The split must be adapted to the project. The customer should not have paid significantly more than the value of what has been delivered.

The final part should only be paid when:

What to do if the invoice is too high

1. Compare with the agreement

Find the contract, the quote, the price estimate and all approved changes.

2. Ask for an itemised invoice

Ask for hours, materials, mark-ups and additional charges.

3. Check the pricing model

Was the amount a fixed price, a maximum price, a price estimate or just a price indication?

4. Check the 15 percent rule

If it was a price estimate, calculate the normal limit. Distinguish between an overrun on the main work and genuine additional work.

5. Ask for documentation of the additions

Who ordered them? When were they approved? What price was agreed?

6. Dispute the invoice in writing

Explain which amount you disagree with and why.

7. Pay the undisputed part

Do not withhold more than the amount in dispute.

Suggested message when you disagree with an invoice

Subject: Objection to invoice [invoice number]

Hello,

I refer to invoice [number] for [amount] kr and the agreement dated [date].

The agreed pricing model was [fixed price, maximum price, price estimate or hourly rate]. I dispute [amount] kr of the invoice because:

I request an itemised invoice showing hours worked, materials, mark-ups and all additional charges. For each item of additional work, I request documentation of when the work was notified and approved.

The undisputed part of [amount] kr will be paid by the due date.

I request a written reply by [date].

Kind regards [Name]

How Fikso can make the price clearer

Through Fikso, the pricing model should be recorded before the work starts.

The parties can describe:

The customer secures the payment before the work starts. Payout can be tied to agreed milestones in line with Fikso's current terms.

If a disagreement arises about the price or additions, the disputed amount can be held back in the payment solution while the parties submit the contract, messages, invoices and change agreements.

This gives both the customer and the tradesperson a clearer basis than verbal agreements and loose price indications.

Checklist before you approve the price

• The pricing model is written down clearly.
• All prices include VAT.
• The scope of work is detailed.
• It states what is not included.
• Materials and mark-ups are explained.
• Mileage and service van are clarified.
• The hourly rate applies to named roles or trades.
• The expected number of hours is stated.
• The price estimate has a clear amount.
• Any maximum price is defined.
• Additional work must be approved in writing.
• Changes must include the price and the effect on the schedule.
• I will receive ongoing timesheets.
• Payment follows progress.
• The final payment is made after documented handover.

Frequently asked questions

The best price is the one both parties understand

Many price disputes are not caused by one party trying to cheat the other. They are caused by the agreement being too unclear.

The customer thought the price was fixed. The tradesperson thought it was only a preliminary estimate. The customer thought the materials were included. The tradesperson invoiced them on top.

A good price agreement should therefore answer:

A fixed price suits work that is clearly defined. A price estimate suits work where the scope is reasonably well known. An hourly rate suits work that is hard to predict.

For many larger projects, the best solution is a combination: a fixed price for the planned work, a clear price cap and a written hourly rate for approved additions.

Method and sources

This article is based on Norwegian consumer rules and guidance available in August 2026. The specific assessment of a price agreement depends on the contract, the communication and the circumstances of the job.

Sources:

This article provides general information and is not individual legal advice.