How much should I raise my prices in 2027?

There is no single right percentage. Work out your 2027 cost per job or per item, including any new wage rate and payroll costs, then set the price that gives you your target margin. For some services that will mean a few percent, for others a bigger jump, and some prices may not need to change at all.

How do I calculate a price increase?

Divide your cost per job by one minus your target margin. If a job costs you $60 and you want a 40% margin, the price is $60 ÷ 0.60 = $100. Compare that with your current price. The gap, divided by the current price, is the percentage increase you need.

How many customers can I lose after raising prices and still be OK?

Use the break-even formula: price increase ÷ (margin + price increase). With a 30% margin and a 5% increase, that is 5 ÷ 35 = about 14%. You could do about 14% fewer sales and still make the same profit. It is a break-even line, not a forecast of what customers will do.

Is it better to raise prices a little every year or a lot at once?

Many owners find a yearly review easier to explain than a large jump after years of no change. Australia's business.gov.au suggests reviewing your prices at least once a year, or whenever your costs or market conditions change. Whatever you choose, give notice and a clear start date.

Should existing customers pay the new price?

Honor anything already agreed: open quotes, booked appointments, prepaid packages and contracts until they end. After that, many owners move regulars to the new price with notice, sometimes a little later than new customers. Check the notice terms in any membership or service contract first.

Can GBot help me raise my prices?

Yes, with the work around it. Sam can recalculate your price list or quotes with your new costs, Kai can look up what nearby businesses charge, and Mia can draft the price-change notice and replies to customers who ask about the new prices. You approve everything before it goes out. GBot does not change prices in your booking or payment system.

How Much to Raise Prices in 2027: Small Business Worksheet

The short answer: to work out how much to raise prices for 2027, calculate what each job, visit, class or item will cost you next year (including new wage rates), set the price that gives you your target margin, and check how many sales you could lose before the increase stops paying for itself. Then raise the weakest prices first, pick one start date, and tell customers before it starts.

This worksheet is for salons and barbers, cleaners and home services, trades, gyms and studios, shops, makers and small agencies. It covers the numbers. When you are ready to tell customers, use our price increase announcement templates. It is a planning guide, not accounting advice.

Why review prices before 2027 starts

Costs in many small businesses change at the turn of the year, and prices often do not. Australia's business.gov.au puts it simply: review your prices at least once a year, or whenever your costs or market conditions change (business.gov.au pricing guide).

For 2027, some cost changes are already confirmed:

US state minimum wages from 1 January 2027. California rises to $17.40 an hour (California Department of Finance), Washington to $17.73 (Washington L&I), New Jersey to $16.48 for most employers (NJ Department of Labor) and Minnesota to $11.87 (Minnesota DLI). The full list is in our 2027 minimum wage checklist.
UK National Living Wage from 1 April 2027. The rate for workers aged 21 and over rises 3.9% to £13.21 an hour, with £11.27 for 18 to 20 year olds and £8.31 for 16 to 17 year olds and apprentices (Low Pay Commission on GOV.UK).
UK employer National Insurance. For the 2026 to 2027 tax year, employer Class 1 National Insurance is 15% on earnings above the secondary threshold of £5,000 a year, and the Employment Allowance is £10,500 (HMRC rates and thresholds).

Add supplier letters, rent reviews and insurance renewals you have already received. If you have built a 2027 budget, these lines are already there.

Step 1: work out your 2027 cost per job

Pick your five best sellers (services, classes or products) and cost each one:

Labor: staff hours for the job x the 2027 hourly rate, plus payroll costs. Include your own time if you do the work.
Materials: products, stock, packaging, fuel, card fees.
Overhead share: a year of rent, insurance, software and other fixed costs, divided by the number of jobs or items you expect to sell.

Cost per job = labor + materials + overhead share.

Example (illustrative): a UK salon pays a stylist the National Living Wage. From April 2027 the rate goes from £12.71 to £13.21, an extra £0.50 an hour. If the stylist already earns above the secondary threshold, employer National Insurance adds 15% of that, so about £0.58 an hour in total. A 45-minute cut uses 0.75 labor hours, so the cut costs about £0.43 more. Small per cut, but across a year of cuts it adds up, and it is only one line of the cost.

Step 2: set the price from your target margin

Margin is the share of the price you keep after costs. Markup is how much you add on top of cost. They are not the same number, and mixing them up is a common reason prices end up too low.

Price = cost ÷ (1 − target margin)

Cost per job	Target margin	Price	Same as a markup of
$60	20%	$75	25%
$60	30%	$85.71	43%
$60	40%	$100	67%
$60	50%	$120	100%

Compare the result with today's price. The gap is your increase:

Increase % = (new price − current price) ÷ current price

Round to a price that looks deliberate, such as $95 rather than $94.37. If you price by the hour, see how to price salon services for the cost-per-hour version.

Step 3: check how many sales you can lose

Owners often hold off on raising prices because they fear losing customers. Do the math first. The question is not whether anyone leaves, but how many could leave before you are worse off.

Break-even sales drop = price increase ÷ (margin + price increase)

Here "margin" means the share of each sale left after the costs that move with each sale (materials, staff time on the job, card fees).

Margin	+3%	+5%	+8%	+10%
20%	13.0%	20.0%	28.6%	33.3%
30%	9.1%	14.3%	21.1%	25.0%
40%	7.0%	11.1%	16.7%	20.0%
50%	5.7%	9.1%	13.8%	16.7%

Read it like this: with a 30% margin and a 5% increase, you could make 14.3% fewer sales and still earn the same profit as before. Lower-margin businesses have the most room, which is also why they are usually the ones who most need the increase. These are break-even points, not predictions of how your customers will react.

Step 4: decide where to raise first

You do not have to move every price by the same percentage. Look for:

Underpriced best sellers. The services or items where Step 2 shows the biggest gap.
Small jobs. A minimum charge or call-out fee for trades, cleaners and repair work, so short visits cover travel.
Rush and out-of-hours work. A clear surcharge for same-day, weekend or evening jobs.
New clients first. Quote the new price to new enquiries now, and move regulars on the start date.
Packages and memberships. Raise the single-visit price more than the package price if you want more people on packages.

Check what nearby businesses charge too, but use it as a sense check, not as your cost. Their costs are not yours.

Step 5: pick a date and honor what is agreed

Choose one start date for the new prices.
Honor quotes already sent until they expire, plus booked appointments, prepaid packages and gift cards. Our quote template shows how to put a validity date on every quote so this is simple next time.
Read the notice terms in any membership, retainer or service contract before you change it.

Step 6: update every place your price appears

Change the price list page, booking system, card terminal or till, online shop, Google Business Profile, printed menu or sign, and quote templates on the same day. A customer who sees one price online and pays another at the counter loses trust fast. The clear price list page guide has a checklist.

Then announce it. Our price increase announcement post has eight copy-paste examples for signs, social posts, emails and texts.

Step 7: track the result for six to eight weeks

Write down, week by week: bookings or sales, average spend, new customers and cancellations. Compare with the same weeks last year and with the break-even drop from Step 3. If sales fell less than the break-even line, the increase is doing its job.

Fill-in pricing worksheet

Copy this into a spreadsheet, one row per service or product.

Service or item	2027 labor cost	Materials	Overhead share	Cost per job	Target margin	Target price	Current price	Increase %	Start date

Where GBot fits

GBot is a set of AI assistants for small businesses at $19.99/mo. For a 2027 price change:

Sam recalculates your price list or a quote with your new costs.
Kai looks up what nearby businesses charge before you set new prices.
Max helps you read the sales numbers you paste in after the change.
Mia drafts the price-change notice and replies to customers who ask about the new prices.

Nothing goes out until you approve it. GBot does not change prices in your booking system, till or online shop.