Price Increase Letter to Clients: Templates
Price increase letter templates for clients: B2B, retail, retainers, freelancers and supplier-cost increases, plus notice periods and a worked example.
A price increase letter tells clients that your prices are changing, by how much, from what date and why, while giving them enough notice to plan. The best ones are short and confident: they state the new price, the effective date and a brief reason, thank the client, and explain what happens to work already booked. This page gives you ready-to-adapt letter templates for different kinds of clients, a calculation example and guidance on notice periods.
For the strategy behind the letter, such as how much to raise prices and how to restore margin, see our guide on how to raise prices without losing customers. This page focuses on the letter itself.
What to include in a price increase letter
| Element | Example |
|---|---|
| Clear subject | "Updated rates from 1 January 2027" |
| Current and new price | "From 95.00 to 105.00 per hour" |
| Effective date | A specific calendar date, at least 30 days away |
| Short reason | Higher costs, expanded service, or a scheduled annual review |
| What is not affected | Signed quotes, booked work, fixed-price contracts |
| Value reminder | One line on what the client continues to receive |
| Thanks and contact | Who to talk to with questions |
How much notice to give
Check your contract first: many service agreements include a notice period or an annual price review clause, which overrides any rule of thumb. A well-drafted service agreement should include one. Without a contract term, these are common practice:
- One-off and occasional clients: update your public prices and honour existing quotes until they expire.
- Regular small clients: 30 days' notice.
- Retainers and subscriptions: at least one full billing cycle, ideally before renewal.
- Corporate clients with annual budgets: 60 to 90 days, timed before their budget is set.
Prices you can change and when depend on your agreements and local consumer law. This is general information, not legal advice.
Worked example: calculating and presenting the increase
A bookkeeper charges a client a monthly retainer of 600.00 and an hourly rate of 60.00 for extra work. They plan an 8% increase.
| Item | Current | Calculation | New |
|---|---|---|---|
| Monthly retainer | 600.00 | 600.00 x 1.08 | 648.00, rounded to 650.00 |
| Additional hourly rate | 60.00 | 60.00 x 1.08 | 64.80, rounded to 65.00 |
| Annual retainer cost to client | 7,200.00 | 650.00 x 12 | 7,800.00 |
Rounding to clean figures makes the letter easier to read. The real increase on the retainer is (650 - 600) / 600 = 8.3%. Say "about 8%" in the letter, or state the new figures only; whichever you choose, the numbers must be exact.
If you cite inflation as the reason, point to official figures rather than general claims: the US Consumer Price Index from the Bureau of Labor Statistics or the ONS inflation and price indices in the UK.
Price increase letter templates
1. Business-to-business letter
Subject: Updated pricing from 1 January 2027
Dear Ms Owen,
Thank you for working with Greenline Landscapes over the past three years. I am writing to let you know that from 1 January 2027 our maintenance rates will increase by 6%. Your monthly maintenance contract will change from GBP 1,200.00 to GBP 1,272.00 (excluding VAT).
This reflects increases in our costs for fuel, plants and labour over the past year. The service you receive, including weekly visits and seasonal planting, stays the same.
Any work already quoted and accepted before 1 January will be invoiced at current prices. If you would like to discuss the change or review the scope of your contract, please call me on 0113 555 0142.
Yours sincerely,
Daniel Price, Director
2. Freelancer to a regular client
Hi Jordan,
I wanted to give you plenty of notice that my rates will change from 1 February 2027. My hourly rate will rise from USD 95.00 to USD 105.00, and the monthly retainer from USD 3,000.00 to USD 3,300.00 for the same 25 hours.
It has been two years since my last change, and over that time I have added analytics reporting to every month's work. Projects already scheduled for January will be billed at the current rate.
Thanks for being such a great client. If you would like to talk it through, I am happy to set up a call.
Best,
Chris
3. Retail or consumer customers
Dear customer,
From 1 March 2027, prices for our standard cleaning visits will change from 90.00 to 96.00 per visit. This is the first change in 18 months and helps us continue paying our team fairly and using quality products.
Visits already booked and paid for will not change. If you have any questions, reply to this email or call us on 555-0142. Thank you for choosing Bright Cleaning.
4. Increase driven by a supplier or material cost
Dear Mr Hale,
Our steel supplier has increased prices by 12% from 1 December. As a result, from 1 January 2027 our fabricated bracket (part BR-220) will rise from 14.50 to 15.90 per unit. Prices for labour and other parts are unchanged. Orders placed before 31 December will be supplied at the current price, so you may wish to bring forward any planned orders.
Kind regards,
Marta Lewis, Sales
5. Annual review clause in the contract
Dear Laura,
In line with clause 7.2 of our services agreement, which provides for an annual price review on each anniversary, our rates will be adjusted from 1 April 2027. The day rate will increase from GBP 650.00 to GBP 680.00. All other terms remain the same. An updated rate schedule is attached.
Regards,
Ravi
6. Offering a phased increase
Hi Kate,
Our rates are increasing by 10% next year. To make the transition easier for long-standing clients, we will apply it in two steps: 5% from 1 January and a further 5% from 1 July. Your monthly invoice will move from 960.00 to 1,008.00 in January (960 x 1.05) and to 1,058.40 in July (1,008 x 1.05).
Thank you for your loyalty. I am happy to talk through it if helpful.
Ben
Subject lines and delivery
Price changes should arrive as their own message, not buried in a newsletter or added to an invoice email. Clear subject lines include:
- "Updated rates from 1 January 2027"
- "Notice of price change for your maintenance contract"
- "Your 2027 retainer: new monthly fee"
- "Price update for part BR-220 from 1 January"
Email is fine for most clients. Send a formal letter, on letterhead and signed, when the contract requires written notice to a specific address, or for large accounts where the letter will be filed with the contract. Keep a copy of every notice with the date sent, so that if a client queries the first invoice at the new rate you can point to the notice.
Sending the letter, step by step
- Decide new prices and update your rate card or price list before you announce them.
- Check each contract for notice and review clauses.
- Segment clients: personal emails or calls for key accounts, a standard letter for others.
- Send at least 30 days before the effective date.
- Prepare answers to likely pushback, and decide which concessions you will offer.
- Update quotes and invoice templates from the effective date. In our invoice generator you can add a short note on the first invoice at the new rate.
If clients reply with questions about invoices at the new rate, the templates for replying to an invoice query apply. And if you are unsure what the new rates should be, our guide to how to price your services walks through the calculation.
What to do on the effective date
On the day the new prices start, check that every recurring invoice, subscription and saved template uses the new rate, and that any quotes still valid at the old price are clearly marked with their expiry dates. Add a one-line note on the first invoice at the new rate referring back to your letter, for example "Rates updated from 1 January 2027 as advised on 15 November 2026". AP teams compare invoices with previous months, and that note answers their question before they ask it.
Mistakes to avoid
- Letting the invoice announce the increase. It almost guarantees a query and a delayed payment.
- Apologising repeatedly or over-justifying.
- Vague dates such as "early next year".
- Raising prices mid-contract without a clause that allows it.
- Different stories for different clients about the reason.
- Forgetting quotes already issued; honour them or state when they expire.
Once the new rates take effect, update your invoices to match. Our invoice generator is free to use with no registration, and you can download each invoice as a PDF straight away.
Frequently asked questions
How much notice should I give for a price increase?
First check your contract, because many service agreements specify a notice period, often 30 to 90 days. Where there is no contract term, 30 days is a common minimum for small clients and 60 to 90 days is courteous for larger accounts that set annual budgets. Retainer clients should hear about it before their next renewal or billing cycle, never on the invoice itself.
Should I explain why I am raising prices?
A short, honest reason helps, such as higher material or software costs, inflation, or expanded services. Keep it to one or two sentences and avoid sounding as if you need permission. You do not have to share your margins. A clear reason combined with a reminder of the value you provide is usually received better than a long justification.
Can I raise prices in the middle of a contract?
Usually only if the contract allows it, for example through a price review or indexation clause, or if the client agrees. Otherwise the agreed prices normally apply until the contract ends or renews. For open-ended arrangements without fixed prices, you can generally change prices for future work after giving reasonable notice. This is general information, not legal advice.
How do I tell long-term clients about a price increase?
Tell them personally before any general announcement, by email followed by a call for your most important accounts. Thank them for the relationship, state the new price and effective date, and consider options such as a phased increase or honouring current rates for work already booked. Long-term clients mostly want fair notice and no surprises on the invoice.
What should I do if a client pushes back on the increase?
Listen to the reason, then choose from a few prepared options: keep the new price and explain the value, phase the increase over two steps, offer a reduced scope at the old price, or agree a longer commitment in exchange for a smaller increase. Decide your limits before the conversation and avoid making an exception you cannot offer to everyone.
Should the price increase appear on the invoice?
The new rate should appear on invoices from the effective date, but the invoice should never be the first time a client learns about it. A short note on the first invoice at the new rate, such as "Rates updated from 1 January 2027 as advised on 15 November", helps AP teams approve it without querying the difference.
Invoice Creator Editorial Team
Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.
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