How to Use Your Time Log to Set Rates for Next Year

Most freelancers set their rates by feel. They look at what they charged last year, add a small increase if they feel confident, and move forward. That is not a strategy. That is inertia.

Your time log is full of actual data. Hours per project. Hours per client. Hours per service type. If you know how to read it, it tells you exactly where your rate is working and where it is costing you money.

Here is how to do an annual rate review using your Time-Trak data instead of guessing.

Pull Your Effective Hourly Rate by Project

For each project you completed this year, take the total invoice amount and divide it by the total hours logged. That is your effective hourly rate for that project.

Do this for every closed project. Write the numbers down. You will see a range.

Some projects will be close to your stated rate. Some will be well below it because scope crept or you underestimated. A few might be above it if you quoted fixed fees and finished efficiently.

The ones sitting significantly below your rate are the ones to study.

Find Out Where Your Hours Actually Go

Filter your time log by task type or activity category across the full year. Look at how many hours you logged to non-billable categories: admin, internal meetings, revisions you absorbed, client onboarding you did not charge for.

Add those hours up. Multiply by your rate. That number is what you did not bill.

Some non-billable time is expected and fine. But if you are losing more than 20 percent of your working hours to unbillable activities that directly support client work, your rate needs to account for it.

Identify Which Service Types Are Profitable

If you offer more than one type of service, compare them. Which ones came in on time? Which ones always ran over? Which service type has the cleanest gap between quoted and actual hours?

This is not just about raising rates. Sometimes the right answer is to stop offering a service that consistently bleeds hours, or to restructure how you quote it.

Your time log, sorted by project type, shows you exactly which work is worth winning.

Calculate What Your Rate Would Need to Be

Take your target income for next year. Add your estimated non-billable hours as a percentage of your total working hours. Divide your target income by the number of billable hours you can realistically log.

That is your minimum rate for next year.

If that number is higher than your current rate, you have a real, data-backed reason to raise it. Not just confidence. Not just a feeling. Numbers from your actual work.

Check Which Clients Pull Down Your Average

Some clients are profitable. Others are not. Your time log can show you which is which.

For each active client, run the same effective rate calculation. Total invoiced divided by total hours. Some clients will be well below your target rate, often because they require more communication, revisions, or support than the scope covered.

That does not always mean you drop them. But it should inform whether you raise their rate at renewal or restructure the engagement.

Lock In the New Rate Before January

Rate conversations are easier when they are scheduled, not reactive. If you have clients on retainer or ongoing work, give them notice before the new rate kicks in. Thirty days is standard. Sixty is generous.

Update your rate inside Time-Trak before you start the first session of the new year. If your rate changes mid-month, you will have to manually sort which entries are at which rate. Avoid that.

Clean data from this year sets your rate. Clean setup now protects your billing all year. The two work together.

Track your time, bill every minute.

Time-Trak is a native Mac and Windows time tracker with a floating timer, automatic screenshots, and one-click invoicing.

Free during beta.

macOS + Windows · Floating widget · Auto screenshots