Tools to Help Calculate and Track Your Rate
Using the right tools can make a significant difference in how effectively you manage your time, track your income, and set your freelance rates. These apps and platforms are especially useful for UK-based freelancers who want to maintain accurate records, stay compliant, and charge fairly for their work.
1. Toggl Track
Best for: Time tracking and project logging
Toggl Track is one of the most popular time tracking tools for freelancers. It allows you to:
- Log billable and non-billable hours by project or client
- Generate detailed reports on how you spend your time
- Estimate future projects more accurately
- Sync with calendar tools and integrate with project management software
Toggl is ideal if you charge hourly or want to ensure you’re not underselling fixed-fee work. It also helps identify tasks that drain your time without adding revenue.
2. FreeAgent or other Accounting Software
Best for: Invoicing, expense tracking, and managing finances
Tools such as FreeAgent and The Balance App are designed for UK freelancers and small business owners, offering key features like:
These tools can help you better understand your profit margins and ensure that your hourly rate covers both your working time and your overheads.
3. Bonsai Rate Calculator
Best for: Freelance rate benchmarking
If you’re not sure where to start with setting your rates, Bonsai’s rate calculator gives you a ballpark figure based on:
- Your role or industry
- Level of experience
- Location (you can specify the UK)
- Type of work (e.g. contract, freelance, full-time equivalent)
While primarily geared towards creative and tech freelancers, it provides helpful benchmarks to compare your current rate against industry averages and expectations.
Bonus Tool: Clockify
Best for: A free alternative to Toggl with unlimited tracking
Clockify is a user-friendly time tracker with:
- Unlimited tracking for projects and clients
- Built-in reporting
- Team collaboration features (ideal if you subcontract)
- Integration with apps like Trello and Asana
It’s a great choice if you’re starting out and want a free tool to help track hours and compare actual time spent against your pricing assumptions.
How to Increase Your Rates Over Time
Raising your freelance rates is not only acceptable it’s essential for maintaining a sustainable business. Costs rise, your experience grows, and your value increases over time. Still, many freelancers hesitate, worrying about losing clients or damaging relationships.
Here’s how to increase your rates professionally and confidently, while maintaining trust and transparency.
1. Announce in Advance
Give your existing clients plenty of notice typically 30 to 60 days before any rate change comes into effect. This shows respect and gives them time to adjust their budgets.
When notifying clients:
- Be clear about the new rate and when it will apply
- Reassure them of continuity in quality and commitment
- Send written notice via email or within the terms of a service agreement
Example email line:
“As of 1st October, my updated hourly rate will be £50. This reflects changes in market rates and the continued investment I’ve made in delivering top-level service.”
2. Frame It as Value-Based
Rather than just citing cost-of-living increases, explain how your services have evolved and what added value you now bring. This shifts the conversation from cost to return on investment.
Examples of value to highlight:
- New qualifications, tools or specialisms
- Improved turnaround times or client communication
- Expanded service offerings or project scope
- Proven results or successful past campaigns
The more tangible your value, the more justified your increase appears.
3. Offer Phased Options
For loyal, long-term clients, consider a staggered rate increase to maintain goodwill. For example:
- Introduce a small rise now, with a second increase in six months
- Maintain the old rate for retained hours, but apply the new rate to ad hoc or rush work
This approach softens the impact and gives clients time to adapt, especially if they’ve worked with you since your early pricing stages.
4. Review Rates Annually
Treat your pricing like your tax return or insurance renewal it needs an annual review.
Consider:
- Inflation and rising living costs
- Increased demand for your niche or skills
- New certifications or case studies
- Competitor benchmarks and market rates
For reference, UK inflation has averaged between 2–10% per year over the last decade. If you haven’t raised your rates in two or more years, you’re likely undercharging in real terms.
Tools like the ONS Inflation Calculator can help justify increases with objective data.
Bonus Tip: Build Rate Reviews into Your Contracts
For new clients, include a clause in your contract stating that rates will be reviewed annually. This sets clear expectations and reduces the awkwardness of bringing it up later.
Example clause:
“Rates are fixed for 12 months from the contract start date. Thereafter, they may be subject to an annual review in line with inflation, market demand and service scope.”
Mistakes to Avoid When Setting Your Rate
Setting your freelance rate isn’t just about the maths. Many freelancers fall into common traps that can affect profitability, work-life balance, and long-term sustainability. Avoid these pitfalls to ensure your pricing reflects the true value you bring.
1. Undercharging Out of Fear
Fear of losing clients or being rejected often leads new freelancers to set their rates too low. While this might attract short-term work, it often sends the wrong message suggesting you lack experience or confidence.
Under-pricing can also lead to:
- Taking on more work to make ends meet
- Attracting clients who undervalue your time
- Struggling to raise your rates later
Low rates are rarely sustainable and can erode your self-worth over time. Instead, focus on justifying your value with clear communication, a professional portfolio, and transparent pricing. A useful resource to back this up is IPSE’s freelance rate guidance: IPSE – What should freelancers charge?
2. Copying Competitors Blindly
It’s important to understand the market, but setting your rate based purely on what others charge can backfire. Freelance rates vary greatly based on:
- Experience level
- Industry specialism
- Geographic location
- Client size and budget
- Overheads and tax setup (sole trader vs limited company)
Rather than copying blindly, use competitor rates as a reference, not a rule. Then calculate your own rate based on your business costs, lifestyle needs, and skill level. You can also check sector-specific surveys or rate platforms like:
YunoJuno Freelancer Rates Reports
3. Ignoring Non-Billable Time
Many freelancers base their rate on a 40-hour work week, but only a fraction of that time may actually be billable. Admin tasks, marketing, learning, quoting and holidays all take time and must be accounted for in your pricing model.
Ignoring this non-billable time means:
- You work more hours than you get paid for
- Your effective hourly income drops
- You struggle to take time off
Always factor in time for client acquisition, admin, bookkeeping, and downtime. Tracking your time accurately using tools like Toggl or Harvest helps identify how much of your time is actually revenue-generating.
4. Failing to Track Time
Even if you charge fixed rates or project fees, tracking your time is essential for profitability analysis. Without it, you might:
- Underestimate how long tasks take
- Price future projects inaccurately
- Miss hidden inefficiencies or scope creep
Time tracking allows you to review and refine your pricing model. For example, if you’re spending 15 hours on a job priced for 10, it’s time to reassess. Over time, you’ll also learn which clients, tasks, or services are the most profitable.
Good time tracking tools include:
What About VAT?
If your annual turnover exceeds £90,000 (as of 2025/26), you must register for VAT. This will:
- Require you to add 20% VAT to your invoices
- Allow you to reclaim VAT on eligible expenses
- Add admin but increase your credibility with some clients
You may also register voluntarily if your clients are VAT-registered businesses.
Final Thoughts on setting your Freelancer Rates
Understanding how to calculate your hourly rate as a freelancer is one of the most powerful tools you have as a business owner. Your rate determines your income, sustainability and positioning in the market.
By using a structured approach considering your income goals, tax, expenses and billable time you can set a fair and confident price that supports your professional and personal goals.
At Accounting Wise, we support UK freelancers with accounting, tax planning, and software that makes running your business easier. Whether you’re figuring out your rates or preparing for Self Assessment, we can help.
