How To Ask For A Raise As A Contractor?

Working as a contractor has its own advantages and disadvantages. However, this article will focus on the problem of how to ask for a raise as a contractor. Often, individuals who work these roles must set out a fixed amount of time to fulfill the contract. Then, unfortunately, needs arise, especially in periods of uncertainty such as inflation or recession, and a raise may be required. 

However, much like other jobs asking for a raise after a year or two is completely normal and sometimes even expected. People in full-time employment would be given the same advice of asking for a raise every so often, so why not contractors? 

So without further ado, here’s how to ask for a raise as a contractor. 

Research the Industry Rate

How To Ask For A Raise As A Contractor?
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The first port of call is to ensure you have data in hand. Consider researching how much similar contractors with similar functions and roles are being paid. If it is possible, identify if your client has given past raises to other contractors. Additionally, use job roles to get an idea of an annual salary. You can do this through our site. 

Be sure to include factors such as skill set and experience to better understand what you bring to the table, especially those factors which make you valuable and unique from other contractors. Using the salary ranges, you should be able to work out where you are currently from the high and low boundaries. Then, use this research to generate a figure for where your rate should be. 

Review your current contract.

How To Ask For A Raise As A Contractor?
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Analyze your current contract with what responsibilities you perform on a regular basis. Consider how integral you are and what results you provide for the company. Additionally, identify any areas where there has been scope creep. Scope creep results in additional tasks and responsibilities that have been added after the initial contract. Those usually go unpaid and should be highlighted to ensure you receive how much you’re worth. Finally, compare your current salary with how much you would like and attempt to identify how you can justify the pay increase. This may come in the form of extra hours you work on specific tasks that are not included in the contract.

Timing is key

How To Ask For A Raise As A Contractor?
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If you’re considering asking for a raise as a contractor, it may be for a range of reasons. One of the most likely ones is an increase in the cost of living and general business costs. As a result, it is also likely that your client may also be facing similar circumstances. If the client is facing financial turmoil, then the likelihood of getting a raise isn’t going to be successful. It’s, therefore, a good rule of thumb to monitor your costs and bring them to your client’s attention as soon as reasonably possible. A good way to do this is to bring it up in conversations about the costs you’re facing so they’re made aware indirectly. 

Additionally, ensure that you have been working for the client for a reasonable amount of time. A minimum of six months would be applicable. Any less, and it may appear to your client that you’re just looking for more money. Moreover, ensure that there haven’t been any recent performance-related issues, as a pay increase request is unlikely to be received well. 

A good way to naturally bring up a pay raise request is following an annual review or close to when a contract is due for renewal. This will allow you to bring up the topic much more easily. However, ensure that you leave your client enough time to consider your raise request. 

Approach Negotiations as a Business

How To Ask For A Raise As A Contractor?
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As a contractor, it’s important to take into consideration that you operate much like a business. Your time is your product, and how much you charge is your overall profit. Additional expenses such as qualifications, equipment, health insurance, and so on eat into your profit. Therefore, your rate should cover these costs. Don’t forget that your unique experience and overall success are your USP. Therefore, when it comes to negotiations, you shouldn’t be afraid to bring up these factors to request a higher rate. 

Preparing for negotiations: Build a case and practice

Before you ask for a salary increase:

  1. Ensure that you’ve covered everything that you’ll bring up.
  2. Ensure that you’re organized, as you’ll need to make your request as professional as possible.
  3. Review the main talking points and how your research and data can support your case.
  4. Consider practicing beforehand so you’re prepared for all types of scenarios. 

Requesting a meeting

Once you’re ready and the time is right, it’s time to request a meeting. Depending on how comfortable you are, you can ask in person to request a meeting to discuss rates. However, an alternative may be to send an email. 

You can use the following script – however, you may wish to alter it as this template is more for an urgent situation where a rate increase is absolutely necessary to continue:

Asking for a raise as a contractor: Email Script

Subject: Request for Meeting to Discuss Rate Increase

Dear [Client’s Name],

I hope this email finds you in good health and high spirits. I am writing to request a meeting with you to discuss the possibility of a rate increase for the services I provide as a contractor.

As you are aware, I have been working with your company for [duration of time] now and have always strived to provide quality work that meets or exceeds your expectations. However, with the rising costs of materials and labor, I find myself in a situation where I am no longer able to maintain my current rates without compromising on the quality of my work.

I believe that we have had a mutually beneficial relationship so far, and I am committed to continuing to provide the same level of service that you have come to expect from me. However, I am unable to do so unless I am able to charge a fair and reasonable rate for my services.

I would like to request a meeting with you to discuss this matter further. I am open to discussing different options and coming up with a solution that works for everyone.

I am available on [Date / Time]. If that doesn’t work for you, please provide a time and date that is suitable. 

Thank you for your time and consideration, and I look forward to hearing back from you soon.

Best regards,

[Your Name]

During the meeting: Professionalism is key.

Once the meeting date arrives, ensure that you’re well-rehearsed and prepared. Begin the conversation by making it clear why you’ve requested the meeting. Use your data and calculated figures here to support the request. 

Keep in mind that the meeting may not go the way you would like – a raise request may be denied. However, this is where negotiation skills need to come into play. You should be prepared with a plan of action for what happens if you can’t get a raise. That may go in one of two ways:

A reduced role

You may find that you can agree to reduce how much work is required while still receiving the same salary. This may open the door for other projects to boost income. Although this may not be what you’d like, it could potentially be a better income than receiving nothing at all. 

Exit Strategy

If your client is completely unwilling to negotiate nor provide a raise request, it may be time to look elsewhere. Once the project is concluded, instead of renewing, it may be time to find new clients. With a fresh new client, you’ll be able to provide the rates that you need without having any ongoing commitments with work in progress. This may make it easier to negotiate. Don’t be afraid to put the best interest of yourself and your business first. However, as an independent contractor, you need to ensure that you have as many satisfied clients as possible. They may choose you as a service provider for future contracts and will be able to grant you higher pay at a later stage.

What is the best way to ask for a raise as a contractor?

How To Ask For A Raise As A Contractor?
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The best way to ask for a raise as a contractor is in person. It is far better to receive an immediate inclination of the likelihood of receiving a raise. If you were to send your raise request and expected rate through an email, it might get left in the inbox and forgotten about. 

How do contractors negotiate salary?

Contractors base their salary on a number of things. As they are not employees, they may not receive the same benefits. Therefore, the contractor will be responsible for purchasing their own equipment to carry out the job. It is important to keep in mind that things like Solo 401(K)s / IRAs and health insurance are the responsibility of the contractor; therefore, they must factor this into their salary request. 

Once a contractor has their total costs worked out, including hourly or project rate, they will put this forward to the client. The client may agree or disagree, and it will be up to the contractor to decide whether to go ahead or look elsewhere. 

Can a contract worker ask for a raise?

Yes, a contract worker can ask for a raise. However, this may not be applicable if the contract is still ongoing or doesn’t allow for an increase. It, therefore, makes sense for that to be included in any contract prior to agreeing. Additionally, once a project or contract expires, it will be up to the contract worker to continue working for the same rate.

When should I ask for a raise as a contractor?

The best time to ask for a raise is prior to agreeing to a contract extension. If the contract is long-term, then after a duration of at least six months, the contract should ask for a raise. However, it’s important to have figures to support why a raise is required. 

How often should a contractor get a raise?

There is no timeframe on how often a contractor should get a raise. As a contractor is not an employee, it is up to them to set their rates. As a result, as long as the contractor feels like they are getting paid what they are worth and in line with market rates, then that is the main thing. 

Bottom line

The key thing to keep in mind when asking for a raise as a contractor is to treat it like a business exchange. As a contractor, it’s your responsibility to charge what you are worth; therefore, you shouldn’t hesitate in requesting a reasonable rate. As long as your performance and skills are to a good standard, then there is no reason why you shouldn’t get a raise. 

We hope you enjoyed this article and found it useful. Feel free to browse the rest of our site for more informative content. 

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