You might be wondering how architects are being paid.
There are several methods on how the architects get paid and these are:
1. Percentage basis
2. Fixed fee
3. Fixed fee plus percentage basis
In our attempt to give you the latest and updated information about the methods of compensation, some more additional information is published in our main website at 3dartrender. You can read the whole article that deals with the 6 methods of compensation for architects under the title "How Do Architects Get Paid?"
Below is an example on how the computation of the professional fee is done. The whole amount (100%) of the professional fee is not paid at one time, it is broken down into four (4) phases that fall under the regular services of an architect, these are;
Upon completion of each stages, the professional fee is paid for with the corresponding percentage of the Professional Fee. See the computation below and the manner of payment for each of the stages;
The commissioning of the architect is the most fulfilling part in the practice of architecture, because this is where he gets his living.
This is a sample computation
1. Percentage basis - each project has its complexity and building are categorized accordingly. Depending on the complexity of the project, the architect is then paid equivalent to certain percentage of the project. The range is in between 5% to 15% of the project construction cost. The higher the cost of the project, the less percentage it becomes. This method of compensation will lead to the next method which is the fixed fee.
example computation:
project cost: $4.5 M
Architect's fee: 5% - 15% ($225,000 to $675,000)
The standard percentage fee for residential design is 10%.
Depending on the level of experience of an architect, the professional fee is within the range of 5% - 15%
Case Studies 1
1. The Manner of Payment: for 5% Professional Fee - $ 225,000
Case Studies 2
1. The Manner of Payment: for 15 % Professional Fee - $ 675,000
2. Fixed fee - or lump sum fee. The architect can set a fixed amount of fee for the services he rendered. This is done especially with small projects where the computation of a percentage fee cannot sustain the architects cost of production, instead of setting percentage fee, a lump sum amount can be set as a payment for his services.
example computation:
Project cost: $4.5 M
Fixed Fee: $400,000
3. Fixed fee plus percentage fee - this method is applicable to large projects. This is normally a combination of a percentage from 3% to 10% plus a fixed amount.
Example computation:
Project cost: $166 M
Fixed fee plus percentage: for the first $100 M fixed fee of $5 M
plus 3% fee for the balance
3% of $66 M is $ 1.98 M
total architect's fee plus : $ 6.98 M
The Method of compensation for architects are discussed in detail under the architects code and the professional practice. For the public's information, these three are the common method of payment.
Hope this will give a brief overview on the manner by which architect is being paid.
Need to design your house?
See our latest design proposals here
go to student resources here
There are several methods on how the architects get paid and these are:
1. Percentage basis
2. Fixed fee
3. Fixed fee plus percentage basis
In our attempt to give you the latest and updated information about the methods of compensation, some more additional information is published in our main website at 3dartrender. You can read the whole article that deals with the 6 methods of compensation for architects under the title "How Do Architects Get Paid?"
Below is an example on how the computation of the professional fee is done. The whole amount (100%) of the professional fee is not paid at one time, it is broken down into four (4) phases that fall under the regular services of an architect, these are;
- Preliminary Design Stage
- Design Development Stage
- Contract Document Stage
- Construction Stage
Upon completion of each stages, the professional fee is paid for with the corresponding percentage of the Professional Fee. See the computation below and the manner of payment for each of the stages;
The commissioning of the architect is the most fulfilling part in the practice of architecture, because this is where he gets his living.
This is a sample computation
1. Percentage basis - each project has its complexity and building are categorized accordingly. Depending on the complexity of the project, the architect is then paid equivalent to certain percentage of the project. The range is in between 5% to 15% of the project construction cost. The higher the cost of the project, the less percentage it becomes. This method of compensation will lead to the next method which is the fixed fee.
example computation:
project cost: $4.5 M
Architect's fee: 5% - 15% ($225,000 to $675,000)
The standard percentage fee for residential design is 10%.
Depending on the level of experience of an architect, the professional fee is within the range of 5% - 15%
Case Studies 1
1. The Manner of Payment: for 5% Professional Fee - $ 225,000
- Preliminary Design Stage - 20% of Professional Fee - $ 45,000
- Design Development Stage - 40 % of Professional Fee - $ 90,000
- Contract Document Stage - 25 % of Professional Fee - $ 56,250
- Construction Stage - 15 % of Professional Fee - $ 33,750
* The Professional fee is based on the actual construction of the building, therefore, the fee for the last stage will be adjusted according to the percentage of the actual cost of the project.
Assuming the final construction of the project cost is $5.0 M as per the previous estimated cost of $4.5M the Professional Fee is adjusted to $250,000 instead of $225,000, therefore the final payment of $ 33,750 upon completion of the project is adjusted adding the remaining balance of $25,000. The total amount then becomes $58,750
Case Studies 2
1. The Manner of Payment: for 15 % Professional Fee - $ 675,000
- Preliminary Design Stage - 20% of Professional Fee - $ 135,000
- Design Development Stage - 40 % of Professional Fee - $ 270,000
- Contract Document Stage - 25 % of Professional Fee - $ 168,750
- Construction Stage - 15 % of Professional Fee - $ 101,250
* The Professional fee is based on the actual construction of the building, therefore, the fee for the last stage will be adjusted according to the percentage of the actual cost of the project.
Assuming the final construction of the project cost is $5.0 M as per the previous estimated cost of $4.5M the Professional Fee is adjusted to $750,000 instead of $675,000, therefore the final payment of $ 101,250 upon completion of the project is adjusted adding the remaining balance of $75,000. The total amount then becomes $176,750
2. Fixed fee - or lump sum fee. The architect can set a fixed amount of fee for the services he rendered. This is done especially with small projects where the computation of a percentage fee cannot sustain the architects cost of production, instead of setting percentage fee, a lump sum amount can be set as a payment for his services.
example computation:
Project cost: $4.5 M
Fixed Fee: $400,000
3. Fixed fee plus percentage fee - this method is applicable to large projects. This is normally a combination of a percentage from 3% to 10% plus a fixed amount.
Example computation:
Project cost: $166 M
Fixed fee plus percentage: for the first $100 M fixed fee of $5 M
plus 3% fee for the balance
3% of $66 M is $ 1.98 M
total architect's fee plus : $ 6.98 M
The Method of compensation for architects are discussed in detail under the architects code and the professional practice. For the public's information, these three are the common method of payment.
Hope this will give a brief overview on the manner by which architect is being paid.
Need to design your house?
See our latest design proposals here
go to student resources here
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