Freelance day rates: How to calculate yours and raise it without losing clients

Autonomy over your schedule. Working from your favourite independent coffee shop. No overbearing boss. Freelancing has a bounty of benefits – but calculating your rate definitely isn’t one of them.

With freelancers facing a £208k pension shortfall compared to full-time employees, undercharging can leave you scraping by with nothing left to save, while charging too high risks pricing yourself out of work entirely as competition grows increasingly steep.

There’s no one-size-fits-all rate for a market this diverse. Yet, to help you avoid being short-changed or pricing yourself out of the game, we asked five experienced freelancers – spanning social strategy, VFX, and senior government – how they calculate their rates and for tips on how to raise them without scaring off good clients.

Start with a basic formula, then adjust it to fit you

Before landing on a number, it’s worth running your costs through a freelance rate calculator to get a baseline figure. They offer a quick way to reality-check your pricing, using a standard formula of target income plus business expenses, divided by billable hours. 

From this jump-off point, how freelancers refine this baseline varies wildly. 

Amy Dawson, co-founder of PR and copywriting agency Gatekeeper Communications, considers a combination of market rates, business costs, and personal income goals to calculate her day rate. Notably, her calculation doesn’t just factor in her time and expertise but also overheads like software subscriptions, equipment, and unpaid administrative work. 

“I also make sure my day rate aligns with my hourly rate so that I can price shorter projects fairly and consistently,” she adds.

Will Jennett, freelance VFX artist, keeps it simple. He loosely bases his rate on industry trends, but in order to get the best return possible, he continually tries to push his prices higher each January, until he receives pushback from people. 

For Katie Barnett, freelance social media strategist and content creator, it’s more instinct-led. Her pricing strategy is based on a combination of how valuable the job or project is to her, and a read on what sort of budget the client has. “Generally, I am flexible, but I need to feel as though it’s worthwhile for me.”, she tells us.

Know when it’s time to raise your rates

For many freelancers, knowing when to pull the trigger and raise their prices can feel like an impossible judgement call. However, instead of treating it like a guessing game, Amy Dawson suggests following the data instead. 

“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.” If costs are rising and your prices aren’t, she warns, “it will significantly affect your end-of-year profitability.” 

Chris Wilson-Cambata, founder of freelance platform Mint Gecko, points to a similar set of telltale signs. “Being consistently fully booked, receiving very little resistance to proposals, and taking on increasingly complex or valuable work are all strong indicators.” 

He also recommends building in a routine check-in regardless of how busy you are – “Rates should also be reviewed at least annually to reflect rising costs and growing expertise.”

For Will Jennett, the test is more of a two-way dance. “If your clients are saying ‘yep, no worries’ to your rate, you should try charging the next one more until they push back.”

In his experience, clients rarely pay you more voluntarily. “It’s very rare they’ll push your rate higher to match their budget if there (is) room at the top”. So, instead of playing a waiting game, Jennett believes the responsibility sits with the freelancer to test the ceiling. 

Ultimately, whether it’s profit margins or a client who never pushes back, knowing when to raise your rates will depend on your industry, experience, and circumstances.

Yet, every freelancer we spoke to points to the same conclusion – the signals are usually there long before the confidence is.

How to actually raise your rates without losing clients

For many freelancers, the fear isn’t just asking for more money; it’s the awkward conversation that comes with it. 

Amy Dawson believes this anxiety is often misplaced. “It comes down to building strong client relationships and consistently demonstrating the value of my work,” she says. “When clients can clearly see the business benefits that you bring… a rate increase is much easier to justify.”

For Chris Wilson-Cambata, this process is also about being non-apologetic and letting clients know ahead of time. “The key is to provide reasonable notice and communicate the change clearly and confidently,” he says, adding that freelancers shouldn’t be shy about explaining why: “the additional experience, reliability, expertise or value clients now receive.”

Flexibility also matters to Katie Barnett, who prefers adjusting the scope of work instead of applying a blanket rate increase to all clients. For clients she particularly wants to keep, she says, “I have on some occasions accepted a slightly lower rate but with a reduced scope of work.”

And sometimes, a client will simply leave, which Wilson-Cambata argues isn’t necessarily a failure. “Retaining every client should not be the objective if doing so makes the freelancer’s business financially or personally unsustainable.”