How can I increase my freelance pay?

We Brits are very squeamish when it comes to talking about money, and asking for a pay rise or a higher rate as a freelancer can feel excruciating.

However, when it comes to your career, this is one conversation you need to get good at.

In this article, we explain:

• How to figure out what you should be paid
• How you ask for and negotiate a rate increase
• Tips for negotiating your day rate

Why you need to review your rates regularly

It’s simple, you should get paid properly for the job you do. Freelancers also need to consider all the other aspects of work life, which those who are employed don’t have to think about:

• No safety net of a staff role
• Don’t get the same benefits as staff, such as sick pay, holidays and employer pension contributions
• Update your equipment and training
• Buy insurance
• Rent a workspace

Also, if you haven’t received a payrise in some time:

Inflation surged to 10.1% in the year to July 2022, the highest level in 40 years. The rising cost of living means your wages are being stretched further.

The average wage growth figures in the UK – in a normal, non-pandemic year – are around 2-2.5%, which also means everyone else has been getting a pay rise except you. OK, so not everyone! It is an average figure, but you get the idea!

You need to think about the long term. If you haven’t already, it’s a very good idea to set up a pension and consider any contributions you add to your pot as part of your fee. 

Want to be your own boss? Find out how to become a freelancer

How to work out what you should get paid

Quote a figure that is too high and you could scare off a potential or existing customers. Quote too low and you risk undervaluing yourself or appearing too cheap that a client may think you don’t produce high quality work.

Either way you could lose clients.

You need to get an idea of how much to charge:

• Use websites like Glassdoor, Indeed or LinkedIn to give you a benchmark figure
• Talk to people you know within your industry
• Go to networking events – in person or on Zoom – and start chatting on social media forums and groups
• Join a union, if your industry has one, as they can be very helpful for freelancers, not only in helping you to set pay
• Ring up the HR departments of companies that would require services like yours and see if they will give an indication of pay.

The more research you can do, the more accurate a picture you can build up.

• Find out more: Top tech tools for freelancers

What can you do to increase your value?

Now might be a good time to also take a look at what you are offering so that if it comes to negotiating your pay, you have plenty of evidence to show why you deserve it:

• Could your website do with a refresh
• Is your social media content of high quality, especially LinkedIn
• Is your training up to date
• What do your customers say about you

It is a competitive world out there. If you can make yourself stand out from the crowd and be the best at what you do, why shouldn’t you charge business owners slightly more than just the average?

When making future financial plans, find out how you can factor in the cost of inflation here.

How do you ask for a rate increase?

Once you’ve decided it’s time to raise your rate, asking for comes next – and it is much more tricky with existing, especially long term, clients.

As a freelance business, you can charge clients:

• A daily or hourly rate
• A project fee

If it is the latter, always ask any potential paying clients to give you their figure first: what is their budget? Their answer may surprise you.

• Be clear in your mind why you deserve a rate increase
• Treat the initial figure as a jumping-off point
• Explain to existing clients why you’re raising your freelance rates
• Give clients plenty of notice for rate changes
• Treat every negotiation rationally, with a cool, calm head
• Knowing what you want and what you are worth

If you have been caught out of the blue by a new client, don’t feel pressured to give an answer straight away.

Instead, ask for some time to calculate your costs for that particular job – making sure you get as much information on the project as possible.

How do you negotiate a day rate?

Think about what you will do if your clients are not willing to pay more. No one wants to pay higher prices than they have to for anything. How flexible are you prepared to be?

There are a number of occasions where accepting less could be a smart move. Perhaps you are new in an industry or to a particular area that you would like to get more involved in, or there may be potential for more work in the future or a longer term contract.

It is really up to you and your circumstances, but don’t undervalue yourself.

• Do your research
• Get networking
• Invest in yourself
• Be rational, not emotional
• Make a plan

If a client chooses not to go with you, then don’t be frightened to ask them why. It may not be the price you are charging but something else altogether and it could help you get work in the future.

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