Know Your Worth: When It’s Time To Adjust Your Freelance Rate

By WFHR Editor

If you take a job as a regular employee, you will enjoy a few guarantees as a side effect of this work.

For example, you know you will get paid on time, and you can be sure there will always be coffee in the breakroom.

Finally, you also know that you will get an annual assessment. At this annual assessment, there is a chance that you will get a raise. I remember that when I worked a W-2 job, I could count on an annual raise as long as I was doing a good job.

Unfortunately, if you work as a freelancer, you are in control of setting your own rates. You might be worried that your clients will run away if you decide to raise your raise, even if you believe this is fair.

Therefore, it is important for you to use a freelance rate calculator to ensure that you are charging a fair rate for your work.

When should you decide to raise your rates, and how much should you raise them? Always know your worth when bidding your rate. All these deductions, like taxes, ensure it will not compromise your salary.

During tax season, some freelancers would use tax software to manage the deductions. There are a few key points that you should keep in mind.

Use a Freelance Rate Calculator To Help You Develop Your Freelance Rates

Before you decide if it is time to raise your freelance rate, it is important for you to understand how your rate should be calculated. You may not know exactly how you should calculate your hourly rate.

In some cases, you might actually get paid per project instead of per time. The good news is that there are tools available that can help you if you are wondering, “How do I calculate my freelance rate?”

Using a freelance hourly rate calculator, such as the hourly rate calculator provided here, you can ensure that you are charging a fair price for your services. Make sure that you use this calculator to calculate your hourly rate.

It is natural for people to worry that they are overcharging their clients. At the same time, you want to ensure you are being paid a fair price for your professional services.

Using a freelance hourly rate calculator can help you do that. Now, it is important to look at why you may need to raise your freelance rates.

See Related: How to Register as a Freelancer?

Inflation Will Eat Away At Your Salary

The most common reason you should consider raising your hourly rate is that inflation will eat away at your salary. As time passes, the cost of goods and services will go up. For example, 20 years ago, it was not unusual to see the price of a gallon of gas under $1.00.

Now, finding a gallon of gas priced at less than $2.00 can be a challenge! The same is true for goods at the grocery store. Even though it can be frustrating, the reality is that the price of goods and services is going to go up over time.

Therefore, in order for you to maintain your standard of living, let alone increase it, you are going to have to increase your freelance rates from time to time.

In general, inflation is going to fall somewhere between 1 and 2 percent every year.

Although you do not necessarily have to raise your freelance rates for all your clients annually, evaluating them at least once per year is a good idea.

In some situations, you may want to consider keeping your freelance rates the same for existing clients while increasing what you charge for new clients.

Increasing your hourly rate for everyone might be a good idea in other situations. It might be time if you haven’t raised your rates in a while. Otherwise, inflation is going to eat away at your pay.

You Should Know Your Worth

Let’s go back to a W2 job for a moment. The longer you stay at the same job, the more you will get paid. The longer you work for a specific employer, the more valuable you become to that company.

You know how the company operates and understand its daily operations. You know how to do your job, and you do it well.

Frankly, it would be nearly impossible for the company to replace you promptly. When you work as a freelancer, all of these points hold. The only difference is that you control what you charge instead of an employer controlling how much they pay you.

If you are wondering “how to calculate my freelance rate,” think about your working relationship with your clients. After a while, you will understand each of your clients. You will know what they expect and how to meet their needs.

Even though you are afraid that you may scare off some of your clients, this fear should not completely scare you away from raising rates. The reality is that your clients do not want to have to deal with replacing you.

Therefore, consider occasionally raising your freelance rates by a small percentage. If your clients understand your worth, they will understand that you will charge more after a certain time.

After all, you have a job like regular W2 employees.

See Related: How to Get Freelance Clients

You Are Receiving More Requests from New Clients Than You Can Handle

Ultimately, the world of freelance work comes down to supply and demand when you wonder “how to calculate my freelance rate.” There may come a point when your work has gotten so good that you receive more requests from new clients than you can handle on a platform such as Fiverr.

If this is the case, then it is time to raise your rates. You are worth what the market says you are worth. If the market says you have too much work to handle, you should consider charging more for the work you provide so that you can handle the work requests.

This is another reason freelancers need to track the hours they work regularly. Sometimes, you might be working more hours and not even realize it. Using a freelance rate calculator lets you easily track the number of hours you are working.

If you realize that you were working about 30 hours per week about six months ago and now are working about 60 hours per week, this is a sign that you are generating new clients.

Even though you like that you are making more money, you might not like that you have less time to do other things you enjoy.

Therefore, it is a good idea for you to reduce the number of hours you work by charging more for the work you provide. If you are receiving many requests from clients and have difficulty prioritizing them, prioritize the clients willing to pay you what you are worth.

See Related: Toptal vs Upwork: What Is Better?

You Are Providing a New Service

Finally, if you realize that you are providing a new service you did not provide in the past, it is time to consider charging more money.

For example, many freelance writers regularly generate blog posts, technical articles, and website copy.

They probably have a set per-word rate that they charge for the services. Or, they have negotiated a separate flat rate with individual clients to make the pricing easier.

On the other hand, copywriting is only one portion of digital marketing. Some freelance writers are trying to expand their services on platforms such as Solidgigs to become a one-stop-shop for some clients.

Therefore, some of the services that they may consider adding in the future include:

Website development, such as posting their own copy on the website of their clients for them
Generating MLA citations for technical articles they might be writing for some of their clients
Adding images and videos to the work that they produce to make it more comprehensive using a platform such as 99designs
Conducting search engine optimization refinement using advanced plugins (such as Yoast on WordPress) for all of the articles that they write

If they were not providing these services in the past, it is important to consider charging more for them now. Even though the services above will not necessarily add words to the content they produce, they still spend a lot of time providing these services.

Therefore, they need to charge a fair trade for their services. This is just another sign that it is time to raise the freelancer rate.

See Related: Best Apps for Freelancers

How Can I Raise my Freelance Rates?

Once you stare at black-and-white numbers from a freelance hourly rate calculator, it is clear that you need to charge more for the work you provide.

At the same time, you must ensure you raise your freelance rates appropriately. You can’t simply send invoices to your clients with higher rates and expect them to pay them without asking questions.

Therefore, there are a few important points that you need to keep in mind if you are trying to raise your freelance rates correctly on developer platforms such as Toptal, freelance writing sites, or even for private clients.

See Related: Freelance Skills to Learn

Give Your Clients a Lot of Notice

If you are thinking about raising your freelance rates, the most important tip is to give your clients plenty of notice. Nobody likes surprise bills.

For example, if you have an emergency home repair or a large medical expense, you haven’t budgeted for it. Therefore, it only makes sense that you’re going to be frustrated.

If you raise your rates, ensure the notice comes several months in advance. Then, make sure that the notice is conspicuous. It might even be helpful to contact your long-term clients in advance to let them know personally that your rates are going up.

There’s a good chance they’re going to understand why. They have stuck with you for a long time because you provide exceptional services. They understand that you are worth it.

See Related: Fiverr vs Freelancer

Make a Routine

Inflation is not going anywhere anytime soon. Of course, your expenses are going to be the same as well. As long as inflation continues to rise, you need to ensure you raise your rates appropriately.

Therefore, developing a routine with some of your clients might be helpful. Even though long-term and repeat clients are less common than they once were, you might want to consider raising your rates by the same amount for new clients every year.

Then, you only have to raise your rates for repeat clients sporadically because you are charging your new clients more money. Think about this as giving your long-term clients a discount in exchange for their loyalty.

Of course, there may come a time when their rates have to go up as well.

See Related: Best Freelance Writing Jobs

Don’t Increase Your Rates Too Much at Once

If you realize you are undercharging for your services, you might be tempted to raise your rates simultaneously. However, increasing the percentage too much will scare off your clients, who will believe they are being gouged.

Instead, limit the percentage increase to small increments over a prolonged period. That way, you will be doing what is right for yourself and your clients.

These are a few key points to keep in mind when raising your freelance rates. Take the time to inform your clients of the raise in advance. Explain to them why you are raising your rates, and do not increase your rates on new clients too soon.

As long as you are upfront with your clients, there is a good chance that most of them will understand why you are increasing your rates. Ensure you are getting paid what you are worth as a freelancer.