← Guides

Raising Rates with Existing Clients

By Andrew James Flores, Nathan Management · Updated September 23, 2026 · Editorial Standards

An existing client already knows your work and pays on a known schedule, so a raise with them deserves more care than a quote to a stranger. This guide takes the decision in order: how much to raise, how much paid work the raise can afford to lose, when it takes effect, how to roll it out across several clients, and what the notice should say. The rate floor and income figures use the calculator’s formula, so you can enter your own numbers there. The 3.4% inflation figure is cited from the BLS; the notice periods, the 15% one-step threshold, the six-month spacing and the three-month replacement period are this guide’s recommendations and assumptions, not calculations.

Size the raise from your rate floor

Start with the lowest hourly rate that covers your plan. In the calculator, fill in “Personal income goal, before taxes ($/year)”, “Business operating costs ($/year)”, “Personal benefits budget ($/year)”, “Billable hours per working week”, “Weeks with no billing each year”, “Invoices eventually collected (%)” and “Fees on collected payments (%)”. With the calculator’s assumed example inputs — a $75,000 income goal, $5,000 of operating costs, no benefits budget, 25 billable hours a week, 4 weeks with no billing, 100% collected and no fees — the plan has to invoice $80,000 a year across 1,200 billable hours, so the floor is $80,000 ÷ 1,200 = 66.666…, rounded up to $66.67 an hour.

Then enter each client’s current rate in “Current or proposed rate ($/hour)”. The result labelled “Personal income before taxes at this rate” shows what your year would look like if every billable hour sold at that client’s price. Table 1 runs that check for four rates below the floor.

Raises are rounded to the nearest 0.01%, and each one lands at or just above $66.67. The extra $4.00 in the last row comes from rounding the floor up to the cent. If only one or two clients sit below the floor, size the gap per client: a client paying $55.00 an hour for 8 billable hours a week across 48 working weeks buys 384 hours a year, and the shortfall against the floor is ($66.67 − $55.00) × 384 = $4,481.28 a year.

For a retainer, convert the fee to an effective hourly rate first: the monthly fee divided by the hours the work actually takes. A $4,000 monthly retainer that takes 69 hours a month earns $57.97 an hour. Using the assumed plan above, covering the floor for those 69 hours takes 69 × ($80,000 ÷ 1,200) = $4,600 a month, a 15% raise; multiplying by the rounded $66.67 instead gives $4,600.23, a 23-cent rounding difference. That $4,000-to-$4,600 retainer is the running example for the rest of this guide.

Author’s practice: if the raise needed to reach the floor is 15% or less, make it in one step. If it is larger, split it into two written steps about six months apart and put both fees and both dates in the first notice. Pricing above the floor is a market decision; the benchmarking guide covers how to research what comparable work sells for, and the rate floor tables show floors for other income goals and hours.

If the reason is inflation, show the arithmetic

Rising living costs are a fair reason to give when you name the index and the dates. The figure used here: Consumer prices rose 3.4% over the 12 months ended August 2026 (BLS Consumer Price Index, not seasonally adjusted), measured for all urban consumers (CPI-U). Worked example: the $4,000 monthly fee in the sample notice below was last set in a December 1, 2025 agreement. When that notice goes out on October 2, 2026, the latest 12-month figure is the one ended August 2026, so keeping pace with it takes $4,000 × 1.034 = $4,136 a month.

A cost-of-living adjustment holds your fee steady in real terms; it does nothing to close a gap to the floor. In the running example the floor calls for $4,600, well above $4,136, so the floor sets the size of the raise and the CPI figure is supporting context. If your contract names an index or a review month, use exactly that index and period.

How much paid work can a raise lose?

A higher price can still bring in less money if enough paid work leaves. With a price rise of r, revenue stays level only while paid volume stays at or above 1 ÷ (1 + r) of what it was, so the break-even loss is 1 − 1 ÷ (1 + r). Table 2 applies that formula to five raise sizes, using ten equal $4,000 monthly retainers ($40,000 a month) as the portfolio.

The break-even percentages are the same at any portfolio size; ten equal retainers are used only to make departures countable, so this portfolio is a separate illustration, not the 1,200-hour plan above.

The practical reading: a 5% or 10% raise across ten equal clients cannot absorb losing even one of them, because nine clients at $4,400 bring $39,600, which is less than the $40,000 you started with. A small raise asks less of each client, but it also leaves the least room for a departure. Table 3 shows the same portfolio in dollars.

Table 3 assumes ten equal clients. When clients have different scopes, count paid volume rather than headcount: one large client can outweigh three small ones, and losing the one $4,000 retainer you depend on stops $4,000 a month until replacement work is sold and paid.

Losing a client also frees hours. In the hourly example above, the client paying $55.00 for 384 hours a year brings $21,120.00. If that client leaves after a raise request, the same hours resold at the $66.67 floor bring $25,601.28, once they are resold and paid. A raise pays off fastest when your calendar is full and replacement work is waiting; with an empty pipeline, the revenue stops first and the replacement arrives later.

Timing and cadence

The best time to raise a rate is at a boundary the client already expects. The points below are the author’s practice; where your contract says something different, the contract wins.

• Review once a year, on a fixed date. Check every client against your floor in the same month each year, so no rate goes much more than twelve months without a look.
• Give the notice your contract requires, and at least 60 calendar days for a monthly retainer. That spans two billing cycles and gives the client time to plan. For hourly clients with no fixed term, give at least 30 days and apply the new rate to work booked after the effective date.
• Leave work already priced alone. A fixed-fee project or a signed statement of work keeps its price. The new rate starts with the next statement of work or billing period.
• Ask about the client’s budget calendar. An organization that sets budgets once a year needs your number before that planning starts, not after it closes.
• Attach the raise to a natural boundary. A renewal, a new statement of work or an expanded scope gives the new price a reason the client can see.

Grandfathering, one batch date, or contract anniversaries

With several existing clients, you also choose how the new rate rolls out. Each approach trades administrative effort against how much revenue is exposed at once.

Author’s practice: new clients get the new rate immediately. Each existing client gets one written notice that sets an end date for the old rate, no later than their next renewal. Grandfathering with no end date is how a legacy rate ends up years below the floor.

The notice: dates, scope and a way to say yes

A rate notice works best as a short amendment proposal: the old and new fee, the exact date the new fee applies, what the client gets for it, and what happens if they do not agree. In the example, the contract allows a fee change on 60 calendar days’ written notice once both sides agree in writing. The notice goes out October 2, 2026 (day 0) and proposes a new fee from December 1, 2026, exactly 60 calendar days later. Table 5 also gives every date as a day count from the send date, so the same schedule works in any year.

Give a reason only if it is true and the client can see it: a scope that has grown, a cost that has risen, or a rate unchanged for a stated number of months. Leave out invented results and any claim about what other clients pay. The invoicing and net-terms guide covers the invoice fields that make the first new-fee invoice easy to pay.

When the client says no

A refusal tells you about the client’s budget; it is not a verdict on your work and not a reason to walk away on the spot. You have four options:

1. Reduce scope at the new unit price. Name exactly which deliverables, revision rounds or response times come out, as the three-article option does, and recheck the effective hourly rate for the smaller scope.
2. Phase the increase. For example, $4,300 from the first effective date and $4,600 six months later: a 7.5% step, then a 6.98% step. Write both fees and both dates in the amendment.
3. Continue under the current contract until its renewal date, and renegotiate then with the numbers in hand.
4. End the engagement under its termination terms. Count the cash before choosing this: if replacing one $4,000 retainer takes three months, $12,000 of revenue stops before new work pays, so check that your reserve covers the gap.

Keep a decision record

For each client, write down the current and proposed fee; the service period and proof of when notice was delivered; the current and proposed scope; expected revenue if the client stays and if they leave; fixed and variable costs; the cash you need before the next receipts arrive; the decision date; and the written acceptance. Revisit the record once the first invoices at the new fee are paid, because an accepted fee becomes income only when the money arrives.

Run the calculator → · Rate floor tables · More guides