How (and Why) should Freelancers Raise their Prices?

Freelancing has a lot of advantages. More people are choosing freelance work over being an employee. According to statistics, freelancer salary in India hovers between ₹ 1.8 Lakhs to ₹ 11.0 Lakhs with an average of ₹ 4.0 Lakhs, according to AmbitionBox study that accounts for 5,900 freelancer salaries.

Though these figures are promising, there is one drawback. For an employee, a pay hike is guaranteed following annual appraisals. It is an automated process, regardless of how meagre the hike is.

On the other hand, a freelancer is his own master. Getting more income means raising the freelance rate. This factor calls for a detailed analysis of various factors and involves a meticulous and time-bound process ensured by the freelancer. Freelancers who earn more than Rs. 8 lakhs have mastered this process.

Reasons why many freelancers refrain from raising freelance rates

Many freelancers fail to reach their true earning potential due to several factors. The main reason is hesitation in raising their freelance rates. This scenario may happen due to

  1. Fear of losing a client.

  2. Low estimation of self-worth.

  3. Confusion on how much to hike.

  4. Limited awareness about the process of raising the freelancing rate.

The same survey mentioned above revealed that entry-level freelance writers earn less than Rs. 3.2 lakhs per year. The average hourly rate for blog writing is Rs. 292/- per hour. Freelance writing itself is underrated and heartbreaking. Requesting a rate hike may result in losing a client. At the same time, freelancers need to know their true worth. Also, the freelancer rate must justify the value a freelancer delivers to their clients.

Moreover, the process of increasing freelancing rates is easy to master. But before we try to learn how to increase freelance rates, it is necessary to know why to do so.

Why do you need to hike your freelance rates? 

The primary need to increase your freelance rate is to earn more money. Apart from this basic need, there are several reasons for a rate hike. We will look at a few of these.

1. Inflation

Every financial decision must be in tune with the rate of inflation. This inflation rate keeps rising every year and affects the lives of everyone. Systematix Institutional Equities estimated that the country's retail inflation would continue to be 7 percent in FY23, higher than the previous estimate of 6.7 percent.

Considering the increase in the inflation rate, charging old freelance rates is certainly not done. The old rates will not be enough for you to sustain the rise in prices of essentials and utilities.

2. Value for skills

The unique selling point of freelancers is their skills. They are valuable to the client as they save them many costs. As a freelancer, you consciously try to hone your skills to the highest level. That is the only way for you to survive in a demanding market environment.

This monetary value to the client must have a corresponding economic deal for you as a freelancer.

3. Freelancer-Client working relationship

When you have worked as a freelancer for a client for a long time, you know exactly what the client wants. This relationship gives distinct advantages to the freelancer and the client. For a client, it is easy assigning any task or job. They do not have to explain how they want the job done. This saves them a lot of time and money. A new freelancer may take a long time to understand the client's style of functioning fully.

It pays to know that a client will place more importance on the working relationship than a fast rate hike. They will still gain a lot from the deal despite paying you more than they used to.

4. Experience and expertise

Over the years, you have gained invaluable experience and expertise. Experience is priceless when delivering high-value service to the client. Expertise in what you do is a natural outcome of your experience. It is perfectly normal to demand a higher price for your knowledge and expertise. The ambitionBox study mentioned before also revealed that the average income increased for those experienced for 4 to 9 years earning 5.2 lakhs per year, while those working in the domain for more than a decade earned more than 8 lakhs a year!

You also acquire new related skills along the way. While these skills can prove valuable to the client, they will also get additional value for you. For example, a freelance writer will progressively learn SEO or content strategy. The new skills will undoubtedly benefit the client as a one-stop shop. At the same time, the freelance writer must negotiate a higher freelancing rate for offering these skills in addition to writing content.

5. Explaining the rate hike

It is essential to explain the reason for the rate increase. Be transparent about the costs you incur. There are a lot of hidden costs involved in phone calls, internet charges, and researching and maintaining records. The rate paid to you must cover these costs too.

If you have worked with the client for some time, you must be aware of the statistical impact of your services on their business. It is a good practice to show how they benefit from your services.

How to hike your freelancer rates? 

Here are some guidelines on how to increase freelancer rates. Though they may seem complicated, many freelancers use them effortlessly. The results are incredibly encouraging.

1. Consider the costs increase with inflation

With the rising cost of living, old freelancer rates have become obsolete. A regular review of rates is required. The period may be yearly, half-yearly, or quarterly. Many freelancers include this clause in their contracts. An increase of 5% to 10% yearly seems fair.

2. Consistent Communication

It is essential to communicate the increase with the client. There must be an advance notice to the client. Ideally, this must be communicated via email. The subject line must be prominent, e.g., "Increase in rates." The communication should be clear. Include the reasons for the rate hike. Include the value you bring to them with the services you render. Include data wherever possible.

There is no thumb rule, but the notice must be at least 2 to 3 months in advance. This factor gives the client enough time to consider the hike. Additionally, you can add reminders about the hike in your invoices and other correspondence. 

It is advisable to communicate in percentages than numeric values. For example, if you are a freelance writer charging Rs. 1000/- for an email, a 10% increase sounds more reasonable than abruptly charging Rs. 1100/- (though both mean the same).

3. Charge on par with the competition

It is vital to know the standard rate for a specific skill. It is tempting in the initial stages to charge lower. This approach is a good strategy for gaining clients and highlighting your talent. However, it pays to be on par with market trends and competitor rates.

Let us take the example of freelance writing. According to a study by Peak Freelance, the average rate for an email to be written in India is Rs. 600/-, while a blog post is written for rates between Rs. 700 and Rs. 1500/- based on word count. On the other hand, a whitepaper could attract charges between Rs. 3000/- to Rs. 15000/- depending on complexity.

4. Reasonable hikes

You may want a 50% hike in the rate. However, this may sound unreasonable to the client. Increments of about 5% periodically are advisable on a periodic basis.

5. Setting expectations

Adding all clauses in a mutually agreed contract is reasonable when taking a new client. One of the clauses should include a percentage hike in the rate on a quarterly, half-yearly, or yearly basis. This clause can be later negotiated depending on the situation.

At the same time, it is also important not to enforce a rate hike for a new client. For example, you acquire a new client in October 2022 with a contract that states a hike of 5% at the end of each year. Demanding a hike in January 2023 is unethical as it is a brief time to develop a working relationship.

6. Prepare for rejection

The client always reserves the right to say no. Your immediate reaction may be to drop the idea and continue working at the same rate. However, it is fair to know the client's reason for denial. Armed with this information, consider the following three approaches.

One could part ways with the client. This course helps if the client pays too low compared to the market average. It is better to work with new clients that can start with the average rates.

The other course is to negotiate a rate that seems reasonable to the client and fair to you.

The third option is to work at the same rate with reduced work boundaries, e.g., finding images, researching stats, and conducting interviews.


Sooner or later, you will have to raise your freelance rates. That is the only way to cope with an increased cost of living. Periodically increasing your rates will also help boost your self-worth. As a freelancer, you are free to work on your terms. You also have a responsibility towards yourself.

Pin It