Hourly billing charges for time spent; fixed fee accounting charges an agreed amount for an agreed scope, usually monthly. Fixed fees suit ongoing compliance and advisory work because they make costs predictable and remove the disincentive to ask questions. Hourly or project pricing still makes sense for genuinely unpredictable one-off work. Either way, the engagement letter defines what you are actually buying.
The real cost of hourly accounting is rarely the hourly rate. It is the question you did not ask because the meter was running: the asset purchase timed wrong, the structure decision made alone, the BAS query left until the deadline had passed. The cheapest advice is the advice you get before the decision, and a pricing model determines whether you seek it.
This guide compares the two models honestly, including where hourly billing remains the right tool, and sets out the questions to ask before signing either kind of engagement. 42 Advisory runs entirely on fixed fees, so you know where we land, but the comparison below is the one we would want as a business owner.
Hourly billing prices the accountant's time: every call, email and task accrues at an hourly rate, invoiced in arrears. Fixed fee accounting prices an agreed scope of work, usually as a set monthly amount covering defined services such as bookkeeping, BAS, tax returns and advice. The models allocate risk differently: hourly puts cost uncertainty on the client, fixed fee puts scoping risk on the accountant.
| Hourly billing | Fixed fee | |
|---|---|---|
| What you pay for | Time recorded, invoiced after the work | An agreed scope, priced up front |
| Cost certainty | Low; the total is known only afterwards | High; the amount is in the engagement letter |
| Effect on behaviour | Questions carry a price, so they get postponed | Questions are included, so they get asked early |
| Adviser's incentive | More hours, more revenue | Efficient systems; the fee is fixed either way |
| Where it fits best | One-off, genuinely unpredictable projects | Ongoing compliance, bookkeeping and advisory |
Neither model changes what a registered agent can do for you. Lodgement program extensions, such as the 15 May 2027 due date for agent-lodged 2025-26 returns under the ATO's registered agent lodgment program, attach to the agent relationship, not the billing method. The dates themselves are in our ATO due dates guide.
Whatever the engagement letter says it includes, and nothing more. A well-scoped fixed fee lists the entities covered, the lodgements included, the bookkeeping and advisory components, and how work outside that scope will be priced. A fixed fee without a clear scope is just an hourly arrangement with a delayed argument.
The engagement letter is where both models succeed or fail. The Tax Practitioners Board's guidance on letters of engagement notes that fee disputes are among the most common complaints, and expects the basis on which fees are calculated and charged to be set out clearly, along with the entities covered and each party's obligations. A typical fixed-fee scope for a trading business covers bookkeeping and payroll, BAS and IAS lodgement, financial statements and tax returns for the entity group, ASIC annual company matters, and a defined advisory layer such as tax planning or forecasting.
Honesty requires saying the quiet part: fixed fee does not mean unlimited. An ATO audit, a business sale or a restructure is new work under any model, and a good fixed-fee firm will quote it separately before starting rather than absorbing it badly or billing it by surprise. The difference is that you find out the price first.
Hourly or capped-hourly pricing remains reasonable for work whose scope genuinely cannot be known in advance: ATO disputes and objections, forensic clean-ups of neglected records, litigation support, and complex one-off transactions. For repeating annual and monthly work, the scope is knowable, so there is little reason the price should not be.
The fair test is predictability. Compliance work repeats: the same BAS quarters, the same year-end, the same payroll cycle. A firm that has done it once can price it. Where a firm insists on hourly billing for routine recurring work, the uncertainty sits with you by design, and it is reasonable to ask why. Conversely, be sceptical of any firm quoting a flat fee for a messy unknown, such as five years of unreconciled accounts, without looking first; a price set blind gets recovered somewhere.
Two Melbourne trades companies each plan to buy a $20,000 ute fit-out in mid-2026. Both are small business entities eligible for the $20,000 instant asset write-off, which requires the asset to be first used or installed ready for use by 30 June 2026.
The rules behind that example are in our instant asset write-off guide. The pattern generalises: pricing models change behaviour, and behaviour changes tax outcomes. The same postponement instinct produces late BAS lodgements, where the failure-to-lodge penalty now runs at $364 per 28-day block, and structure decisions made without advice that cost multiples of any fee to unwind.
Tell us your entities and lodgements and we will scope it properly, in writing, before you commit to anything.
Contact UsFive things: that the practitioner appears on the TPB public register, that the engagement letter lists every entity and lodgement covered, how out-of-scope work will be identified and priced, what the fee assumes about the state of your records, and how either party exits the arrangement.
Registration comes first, before price. Only registered agents can lawfully charge for tax agent or BAS services, and the TPB public register shows registration status, conditions and any sanctions. Practitioners are now required to tell clients about the register and the complaints process in writing, and the TPB's guidance for consumers of tax services is a short, useful read before any engagement. On scope, the question that separates a genuine fixed fee from a teaser price is simple: "what is not included, and what happens when we hit it?" A firm with a real answer has done this before. The broader selection process, beyond pricing, is covered in our guide to finding a good accountant, and indicative Melbourne market rates are on our CPA accountant page.
A Melbourne digital agency came to us running its finances across multiple providers: bookkeeping in one place, the company and trust work in another, the directors' personal returns somewhere else again. Every month brought a different invoice, time billed for emails, and no one holding the complete picture across the trading company, the trust and the individuals.
We scoped the whole group into one monthly fixed fee: bookkeeping and payroll, company financials and tax return, trust administration, two individual returns, BAS lodgements, TPAR and the ASIC annual review. Same obligations, one price, agreed in writing before we started. What changed was not the work; it was that the owners started calling before decisions instead of after them, because the call no longer had a price tag.
42 Advisory runs every engagement on a written fixed-fee scope: tax, bookkeeping, lodgements and advice from a Melbourne CPA firm and registered tax agent.
Book a ConsultationDisclaimer: The information provided in this article is general in nature and does not constitute specific tax, legal, or financial advice. Fee structures and inclusions vary between firms and engagements. We recommend seeking professional advice tailored to your individual circumstances. 42 Advisory is a CPA firm and Registered Tax Agent.
Not necessarily on the invoice; the comparison depends on how much you actually use your accountant. Fixed fees are usually cheaper in total outcome, because included advice gets used before decisions rather than after, and because you avoid the cost of postponed questions: missed deductions, late lodgement penalties and decisions made without advice.
For a trading business, typically bookkeeping and payroll, BAS and IAS lodgement, annual financial statements and tax returns for the agreed entities, ASIC company annual matters, and a defined level of advice or planning. The exact inclusions are whatever the engagement letter lists, which is why the letter matters more than the label.
Good firms identify the out-of-scope work when it appears, explain why it sits outside the agreement, and quote it in writing before starting. Examples include ATO audits, restructures, business sales and catching up prior years. If a firm cannot explain its out-of-scope process before you sign, expect disputes later.
No. Many established firms still bill by the hour, particularly for advisory work, and some offer a hybrid: fixed fees for compliance with hourly rates for everything else. The model a firm chooses reflects its systems; fixed pricing only works economically for firms whose processes are efficient enough to carry the scoping risk.
Search the Tax Practitioners Board public register at tpb.gov.au using the practitioner's name or registration number. The register shows whether they are a registered tax or BAS agent, any conditions on the registration, and sanctions on the public record. Only registered practitioners can lawfully charge for tax agent or BAS services.