How to increase your hourly rate

Why increase your hourly rate?

There are several reasons to increase your hourly rate: 

• Your craftsmanship, knowledge and the quality of your work improve over the years. 
• You want to build up a financial reserve for economically difficult times. 
• Your costs increase

Maybe you are reluctant to increase your rate because:

• your customers will expect more from you; 
• you are afraid that you will lose customers; 
• you simply do not feel comfortable asking more money.

Check your hourly rate

When you started your business, you set an hourly rate. After a while, your activities and objectives may change. The market and the economy are also constantly changing. Consider inflation, rising costs, new legislation and your competitors' rates.

Check whether your hourly rate is still up to date. Use your business plan and financial plan for this. You can also take price developments in the market as a starting point. You can adjust your rate based on a price index from Statistics Netherlands. Watch the video to find out how to do this.

Communicate the price increase

Are you opting for a higher hourly rate? Inform your customers about the price increase. Use the following 7 tips to do so:

1. Communicate in a timely manner

Do you have a large group of regular customers? Then it is especially important that you inform them of the rate increase well in time. Also let them know when the increase will take effect. A sudden confrontation with a rate increase is often found to be very annoying. There is no standard text to announce a rate increase. Prepare your own text for this, one that suits your company. 

Do you increase your hourly rate every half year of annually, due to inflation? Include it in your general terms and conditions. This will prevent surprises and discussions.

2. A personal approach 

If you have few customers, or a few very important ones, inform them personally about the rate change. Visit them or give them a call. You can use the contact moment to talk about possible future assignments.

3. Do not make excuses 

You have carefully considered your rate increase. You do not owe your customers an apology. Send your message about the rate increase as firmly as possible. Do not leave any room for negotiation. 

4. Give regular customers an advantage 

Thank and reward your most loyal customers for their loyalty. For example, by giving them a one-time discount or including something extra, like maintenance. Be creative. That way, your price increase may be a positive instead of a negative. 

5. You can implement the increase in steps 

The advantage of a gradual increase is that your customers can get used to the new price. Are your customers reacting negatively to price increases? Then opt for an increase in one go.

6. Use your hourly rate as a marketing tool 

When you start as an entrepreneur, you can offer your customer an introduction discount. At the same time, tell them that a higher rate is actually customary for your knowledge and skills. If you do not communicate this in advance, you may lose your customer when you increase your hourly rate. 

7. Vary your hourly rate 

Does an assignment take longer than a certain period? Then apply a lower rate. Or use a different rate for qualitative hours than for quantitative hours. 

Determine your hourly rate 

Are you having trouble determining your hourly rate? With a rate that is too high, you price yourself out of the market. An asking price that is too low can give the impression that your work is not very valuable. Calculate your hourly rate based on the video Calculation example of your hourly rate. 

Hourly rate calculation tool 

Use the KVK hourly rate calculation tool (only in Dutch). This allows you to calculate your hourly rate based on a desired net income.