How Frequently to Raise Your Fee

Teachers often ask me whether it's better to increase the fee a little bit each year or to wait several years and increase it by a larger increment.

I wish I had a pat answer, but I don't. It's very individual and depends on what you want your increase to accomplish.

In general, a conservative stance is to increase your fee by 5% (or the cost of living increase) each year. Even if you increase your fee 10% some years, this will amount to no more than one or two dollars per lesson. No one should squawk about that.

If you are moving, this is an ideal time to make a major adjustment in your fee. No one in your new city will know what you charged previously.

If you are not moving, a lot depends on how long it's been since you raised your rate. If it has been five years or more, you might want to go with a higher percentage (20% or more). It it's been two years or less, consider a 5%-10% increase.

If your services are substantially under market price, raise your fee to whatever the prevailing rate is for teachers with your experience and credentials.

If you want to clear the decks, so to speak, and reduce the size of your student load, consider a 25%-30% raise.

If you are fearful of losing a large number of students, perhaps you should not raise your fee above 10%. (You may wish to fill in the worksheets in another file on my homepage that deals with assessing your risk at a fee increase.)

Some teachers include a general notice about fee increases in their studio policies so it is part of the information each new student receives when beginning instruction. Something such as this: "Expect an increase in tuition fees of at least 5% each September." This kind of wording gives you the option of increasing the amount more than 5% if the cost of living has gone up more than that.

copyright 1998, Martha Beth Lewis, Ph.D.
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