Freelancers Share Tactics for Setting and Raising Day Rates

Freelancers face a critical pricing dilemma: undercharging risks a significant pension shortfall compared to full-time employees, while overcharging can price them out of a competitive market. Five experienced freelancers across PR, VFX, social media, and government contracting detail how they handle setting and raising their day rates.

Start with a Formula, Then Adapt

Experts recommend beginning with a basic calculation using a freelance rate calculator, which establishes a baseline by combining target income and business expenses, then dividing by billable hours. From this starting point, freelancers adapt the figure based on their specific circumstances.

Amy Dawson, co-founder of PR and copywriting agency Gatekeeper Communications, factors in market rates, business costs, and personal income goals. Her calculation includes overheads like software subscriptions and unpaid administrative work. She also aligns her day rate with an hourly rate to price shorter projects consistently.

Will Jennett, a freelance VFX artist, takes a simpler approach. He loosely bases his rate on industry trends but actively tests the market's ceiling. "I continually try to push my prices higher each January, until I receive pushback from people," he says. For freelance social media strategist Katie Barnett, pricing is more instinctual, based on a project's value to her and her perception of the client's budget.

Recognizing the Right Time for an Increase

Knowing when to raise rates is a common challenge. Amy Dawson advises following data, not guesswork. "One of the clearest signs it’s time to increase your rates is when your profit margins start to shrink, even though your workload remains the same," she states. She warns that if costs rise but prices don't, end-of-year profitability will suffer.

Chris Wilson-Cambata, founder of freelance platform Mint Gecko, points to several strong indicators: being consistently fully booked, receiving little resistance to proposals, and taking on increasingly complex work. He recommends an annual review at minimum to reflect rising costs and growing expertise.

Will Jennett views the process as a two-way test with clients. "If your clients are saying ‘yep, no worries’ to your rate, you should try charging the next one more until they push back," he explains. He notes that clients rarely volunteer to pay more, placing the onus on the freelancer to test pricing limits.

Executing the Rate Increase Confidently

The fear of awkward conversations often holds freelancers back from asking for more money. Amy Dawson believes strong client relationships and demonstrable value mitigate this anxiety. "When clients can clearly see the business benefits that you bring… a rate increase is much easier to justify," she says.

Chris Wilson-Cambata emphasizes clear, confident, and non-apologetic communication. "The key is to provide reasonable notice and communicate the change clearly and confidently," he advises, suggesting freelancers explain the reasons, such as added experience or reliability.

Katie Barnett values flexibility, sometimes adjusting the scope of work instead of applying a blanket rate hike. For valued clients, she has "accepted a slightly lower rate but with a reduced scope of work." Chris Wilson-Cambata adds that losing a client over a rate increase isn't necessarily a failure, especially if retaining them makes the business unsustainable.

Core Principles Over Perfect Formulas

While no single method fits all, the freelancers agree on core principles. These include starting from a calculated number, not guesswork; treating rates as something to review regularly; and communicating changes with confidence. As former senior government contractor Sarah Ross notes, success ultimately comes down to hitting goals and doing a great job.