How To Calculate Architect’s Fees

There is so much misunderstanding about how to calculate the professional fees of architects and engineers in the building industry. This article teaches you how to calculate the fees of architects either as an architect yourself or a client.

The calculations in this post were done using the 1996 condition of engagement for architects which is still commonly used today. However, you can also learn;

The template for professional fee calculation for all building consultants in construction projects is similar. The major difference is in the percentage each consultant is entitled to.

Once you understand the fee calculation for architects, you can easily apply it to that of the quantity surveyor, structural engineer, mechanical or electrical engineer.

Major methods of fee calculation

  1. Scale of fees
  2. Time charges.

I will focus on the scale of fees but briefly shed some light on time charges.

Time charges

When architects are hired to perform services beyond their normal services or contract period, then they are entitled to remuneration based on time charges. Here, architects can choose to charge hourly rates, daily rates or man-month rates. The rates associated with this time have already been spelled out by the professional bodies.

Services applicable to time charges

  1. Feasibility studies
  2. Special drawings and models
  3. Processing of town planning approval.
  4. Additional site visits other than the single monthly meetings
  5. Site visit or work done during the defect liability period
  6. Site supervision beyond the original contract period.
  7. Redesign or additional design work.
  8. Interior and landscape design

how to calculate architects fee

Scale of fees

This is the most common method of calculating fees. It involves the use of percentages. It is widely used by architects because it is easy to understand and communicate with clients. However, a lot of private clients still reject this method and opt for direct negotiations.

The most important information required in fee calculation using the scale of fees is the estimated total cost (ETC) of construction.

ETC is the preliminary amount the Quantity surveyor (QS) arrives at and says would be the approximate cost at which the construction will be executed. ETC can change in the course of design until the project is awarded and the total construction sum (TCS) is ascertained. When ETC changes in the course of the project, stages 1 & 2 of the architect’s fees can remain the same, but Stage 3 must be calculated with the TCS.

Sometimes, because of the emergency nature of the initial presentation and the need to hastily win over clients, architects are often not opportune to quickly consult the QS before submitting their fee. In a situation like this, another method can be used to determine the ETC.

You extrapolate the proposed building area from your design and multiply it by the prevailing cost per area of construction. The cost per area can be gotten from a QS or from your construction experience.

In Nigeria, you can use a value of between N70,000 – N150,000 per square meter depending on the quality of construction (2018).

Calculating Fees

how to calculate architects fee

Once you have ascertained the estimated total cost (ETC) of construction the next thing is to break it down.

The scale of fee is applied on a sliding scale.

On building projects, Architects are aware they are to charge 4.75% but often wrongly apply it.

You don’t multiply 4.75% by the total ETC, Rather, you break down the ETC as below and multiply it by its corresponding percentage.

Scale of fees when architects are the prime consultant

COST OF PROJECTPERCENTAGE PAYABLE
Up to 5 million 4.75 %
Next 10 million or part thereof 4.5 %
Next 15 million or part thereof 4.25 %
Next 45 million or part thereof 4.0 %
Next 75 million or part thereof 3.5 %
Next 150 million or part thereof 3.0 %
Next 200 million or part thereof
2.5 %
Balance over 500 million 1.75 %

Once you break down your ETC with the above template, you then multiply each segment by its corresponding percentage. Take the total and that is your total professional fee.

Example of fee calculation

ESTIMATED TOTAL COST OF CONSTRUCTIONN 18,200,500
PROJECT COSTARCHITECT FEERATE
5,000,000237,500.004.75%
10,000,000450,000.004.5%
3,200,500136,021.254.25%
0.004.0%
0.003.5%
N 18,200,500
TOTAL FEEN 823,521.25

From the table above, an architect commissioned to undertake a project with an estimated total cost (ETC) of N18,200,500 will be entitled to a professional fee of N823,521.25

Nevertheless, the proportion of the above total fee payable to the architect is determined by the amount of work done. There are 3 stages of payment.

  • 25% (Presentation drawings) – Stage 1
  • 50% (Final drawings and tendering) – Stage 2
  • 25% (Nominal site supervision) – Stage 3

The breakdown of the sample architects’ fee given earlier in stages of payment will be as follows

STAGE 125%N 205,880.31
STAGE 250%N 411,760.63
STAGE 325%N 205,880.31
REIMBURSIBLES40% OF 1% OF ETCN 72,802

Repetitive work

how to calculate architects fee

There are instances where architects work on repetitive buildings. A good example is an estate design, where all the buildings are alike.

There may be a tendency to apply the scale of fees to the total ETC of this project. That would be wrong, as the buildings are similar and would take less work to produce.

Fee calculation for repetitive building can be tricky. The substructure isn’t treated as repetitive work but the superstructure is. All substructure is charged fully, while the superstructure is charged as below. Also, Repetitive reduction doesn’t apply to external works, stage 3 fees (site supervision), or post-contract services of the project.

NUMBER OF REPETITIONS PERCENTAGE PAYABLE
Initial building100%
First 10 repetitions 30%
Next 10 repetitions 20%
Next 30 repetitions 15%
Next 50 repetitions 12.5%
Next 150 repetitions 10%
Next 250 repetitions 7.5%
Balance over 500 repetitions 5%

Reimbursable

Lastly, in addition to the architect’s professional fee, he is also entitled to reimbursable expenses. Claims on transportation, accommodation, printing, computer, office equipment and other incidental expenses incurred on the project.

Reimbursable expenses are 1% of the ETC, out of which the architect is entitled to 40% if it is a building project. The balance of 60% is shared among the other consultants.

The calculations in this post were done using the 1996 condition of engagement for architects which is still commonly used today. However, you can also learn;

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13 thoughts on “How To Calculate Architect’s Fees”

  1. Arc Bunmi Adekanle

    Arc Ehimen.
    Happy to read your articles and to know you are now in Canada. Your presentations are quite educative and I have gained a lot more. Weldone and all the best in your career abroad.

    1. Hi Bunmi,
      It’s good to hear from you. I trust you are doing good too. I am glad you found my articles educative. Thank you.

  2. CHIMA ICHENDU

    Thank you for your detailed presentation. Had the lesson during professional practice class. I was also told that the fee is negotiable. That even government who prepared the scale of fees often don’t agree. In that case what should the architect base his judgement on

    1. Hi Chima,

      It’s common for private clients and corporate organizations to negotiate professional fees but not government bodies. Ideally, every architect who negotiates should negotiate without going less than the total cost of the professional manpower needed, material costs such as printing, travel, utilities etc and profit margin. So, it’s a business decision.

  3. Hi,

    Thank you for your detailed breakdown. How did you come about this cost per sqm for projects in Nigeria
    “In Nigeria, you can use a value of between N70,000 – N150,000 per square meter depending on the quality of construction (2018).” Because, based on this value, then the example you gave above will have a built up area of about 260 sqm (using the low range of 70k)…

    1. Hi Tayo, thanks for your observation. The value I recommended was the average amount I derived from experience on institutional projects and used up till 2018. It is not an absolute amount. As you know, several factors can influence construction costs such as project type, project complexity, quality of finishes, construction procurement type, etc.

      PS. This range may no longer be accurate today because of inflation.

  4. Quite educative, Sir. This will help Architects ascertain their worth in the cause of practice.

  5. Greetings to you Arc. Ehimen..!
    I always enjoy reading your articles.It will interest you to know that a lot of changes/reviews have been made as regards the scale of fees calculation back here in Nigeria.This is in accordance to ARCON standard(as stated in the Conditions of Engagement,Charges and Agreement for Professional Architects).
    Also, the repetitive Works Fees calculation (%) has changed.Now, it is:
    1st = 100%.
    Next 10=50%.
    Next 20=30%.
    Next 30=20%.
    Over 60=10%.
    However,this article has helped me to understand these changes better.As I could compare your detailed breakdown and calculations with the revised one.
    Thanks a million.

  6. It is no news that architects are being cheated by client due to the fact that most architect,in a bid to win project, often ignore or circumvent normal procedures. It on us lies on architectural bodies such as Archon and NIA to wake up and protect the interest of practicing architect in Nigeria

    1. Yes, Sherriff I understand the predicaments of architects. I sometimes wish that we can all unite and insist on professional fees but again judging by the general financial capacity of the public, how many can afford it.

      I also hope that ARCON, NIA and now ANCA will do more to provide value for us, their members and the profession of architecture.

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