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Rate Increase Calculator

How much work you could afford to lose after raising your rates — usually far more than the fear suggests.

✓ Updates as you type✓ Works on mobile✓ Your numbers stay on your device

Your rise

Current hours means the billable hours you work at today's rate.

Current rate/hrIncrease%Billable hours/yr

The maths

How this is worked out

The new rate is the old one plus the increase. Break-even hours are the hours needed at the new rate to earn what you earn now, and the difference is time the rise buys back. The share of work you can lose depends only on the size of the rise, not on your rate or your hours.

New rate = current × (1 + increase) · Break-even hours = current revenue ÷ new rate · Work you can lose = increase ÷ (100 + increase)

Worked example

A worked example

Going from $80 to $100 an hour — a 25% rise — means 800 hours now earns what 1,000 used to. You could lose 200 billable hours, a fifth of your work, and be exactly where you started. If nobody leaves, the same year is worth $20,000 more.

Replace the figures above with your own — the result updates as you type.

Read this before you quote

What the number does and does not cover

The loss tolerance is fixed by the size of the rise. A 25% rise survives losing 20% of your work, a 50% rise survives a third, and a 100% rise survives half. This is the argument against raising rates by 5%.
Losing hours is not the same as losing clients. The clients most likely to leave over a rise are usually the smallest and the slowest to pay, so the hours freed are rarely the hours you most wanted to keep.
Give notice and apply the rise to new work first. A rate change landing mid-project with no warning costs goodwill that the extra revenue does not cover.
If the new rate is still under your rate floor, the rise is not a raise — it is a smaller loss.

Questions

Rate Increase Calculator: questions freelancers ask

How often should freelancers raise rates?

Annually is a reasonable default, if only to keep pace with costs. A rate held for three years is a real-terms pay cut, and the longer it is held the larger and harder the eventual correction becomes.

What if a client refuses the new rate?

The calculator gives you the number that makes that decision calmly: if you can lose a fifth of your hours and break even, one client saying no is not an emergency. Freed hours have a habit of filling at the new rate.

Should I raise rates for existing and new clients at once?

Usually not. Applying it to new work first lets you prove the rate in the market before testing it on relationships you rely on, and it gives existing clients a natural notice period.

Is a big rise safer than several small ones?

Mathematically a large rise tolerates far more client loss, but it also invites more scrutiny. Many freelancers do better raising the rate substantially for new clients while stepping existing ones up over two cycles.

Next step

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