How do you calculate a price increase?

To calculate percentages, you do this: the new price minus the old price, divided by the old price, multiplied by 100. From €1,000 to €1,200, that's a 20% increase. For your business, a second number is more important: how many sales you can afford to lose. If the variable costs per sale are €400 in this example, that's 25%.

What percentage price increase is considered normal?

There is no fixed standard. The key is to determine how much flexibility the price increase allows you. With a base price of €1,000 and variable costs of €400, you can afford to lose 14.29% of your sales with a 10% price increase, but 33.33% with a 30% increase. It's best to test in stages. A simple rule: after acquiring five new customers, increase your pricing and see what the market will bear.

How can I justify a price increase?

With the result your customer receives. You don't implement higher prices with a new price list. You achieve them because customers get something from you that justifies the price. Clearly state what you provide and what benefits it brings to your customer. Don't apologize for the price.

How can I politely announce a price increase?

Briefly, clearly, and promptly. State the new price, the date it takes effect, and what the customer will receive in return. Do not phrase the price as a question. Satisfied customers don't want lengthy explanations; they want to hear a number and know what they'll get for it.

What should you do when the customer does not accept the price increase?

First, determine whether you need to match his offer. The calculator shows you how many sales you can afford to lose without earning less. If you want to accommodate him, don't offer a discount on the same service. Instead, consider reducing the scope of the service. That way, your price will remain credible.

How significant can a price adjustment be?

You set the price for new offers. For existing contracts, the terms outlined in the contract apply, such as a price adjustment clause or a termination notice period. If in doubt, it's best to have this reviewed. The tool will show you, based on calculations, from what number of customers an increase becomes worthwhile.

Business calculator

Price Increase Calculator: How Many Sales Can You Afford to Lose?

By Artur Neumann. Updated October 21, 2026.

Amounts in euros. Enter your own figures below.

Current price (€) Per order, package or product, excluding VAT.

Variable cost per sale (€) Materials, subcontractors and fees. Exclude fixed costs.

Price increase (%) Enter a negative number to calculate a discount.

Current monthly sales

Sales you can afford to lose (%): 25%
New price: €1,200.00
Sales needed for the same contribution: 15
Current monthly contribution: €12,000.00
Extra monthly contribution if all customers stay: €4,000.00

Contribution is revenue minus variable costs. Fixed costs are assumed to stay the same. A negative loss percentage means you need more sales.

Example: €1,000 price, €400 variable cost and 20 monthly sales

Price increase (%)	Sales you can afford to lose (%)	Sales needed for the same contribution	Extra monthly contribution if all customers stay
5	7.69%	18.5	€1,000.00
10	14.29%	17.1	€2,000.00
20	25%	15	€4,000.00
30	33.33%	13.3	€6,000.00
50	45.45%	10.9	€10,000.00

I run my business in Germany. Monetary examples use euros unless another currency is stated.

What This Calculator Does

This calculator answers the question that arises before every price increase: How many customers can I afford to lose before I earn less than I do today? You enter your price, your cost per sale, and the planned increase. The calculator shows you the point at which these two factors balance out. This point is called the break-even point.

If you sell a service, your costs per sale are often small: a freelancer’s fees, licenses for the project, or payment processing fees. You don’t enter your own working hours here. You assess whether those hours are compensated through your hourly rate.

How the Calculation Works

I calculate using the contribution margin. This is the amount that remains from each sale after you’ve paid the costs directly associated with that specific sale. Rent, software, and other fixed costs are not included. They remain the same regardless of whether you have 15 or 20 customers.

Step 1: Current Contribution Margin. Your price is €1,000. Each sale costs you €400, for example, for materials or a freelancer. This leaves a contribution margin of €600 per sale. With 20 sales per month, that’s €12,000.

Step 2: Contribution Margin After the Increase. You increase your price by 20%, to €1,200. The costs remain at €400. Now, you have a contribution margin of €800 per sale.

Step 3: Calculate the Break-Even Point. You divide your current contribution margin by the new contribution margin per sale. €12,000 divided by €800 equals 15. Therefore, with 15 sales, you earn the same amount as you do today with 20.

Step 4: Determine Acceptable Loss. From 20 to 15 sales, you lose 5 customers. That’s a 25% decrease. Only when you lose more than one in four customers does the price increase no longer make sense.

If you retain all 20 customers, you’ll earn €200 more per sale, for a total of €4,000 more per month.

The Smaller Your Margin, the Greater the Impact of the Increase

This may seem counterintuitive at first glance. Take the same 20% increase to €1,200 and simply change the cost per sale.

If a sale costs you nothing, your contribution margin increases from €1,000 to €1,200. You can afford to lose 16.67% of your customers.
If a sale costs you €400, your contribution margin increases from €600 to €800. You can afford to lose 25% of your customers.
If a sale costs you €800, your contribution margin doubles from €200 to €400. You can afford to lose 50% of your customers.

Therefore, those who operate with a tight margin have the greatest flexibility.

Discounts Have the Opposite Effect

Enter a negative number in the calculator, for example, minus 10%. It will then show you the cost of a discount. The price drops to €900. This leaves a contribution margin of €500 per sale instead of €600. To earn the same €12,000, you now need 24 sales instead of 20. That’s a 20% increase in customers, just to earn the same amount. With a 20% discount, you need 30 sales, or a 50% increase.

That’s why I don’t offer discounts on the same service. I learned that in my agency days. When a customer asks if there’s any wiggle room, the best response is a counter-question: What should I remove from the offer? Less service, less price. This way, the original price remains credible.

Common Mistakes

You compare revenue instead of contribution margin. With 15 sales at €1,200, you generate €18,000 in revenue, compared to €20,000. This looks like a loss. However, since the costs for those five sales also disappear, you end up earning the same amount.

You include fixed costs in the calculation. Rent or software costs don’t change due to a price increase. Therefore, only enter the costs directly associated with each individual sale.

You increase prices for everyone at once. You can first test the new price with new customers. A simple rule: after every five new customers, increase your price. This way, you can see what the market is willing to pay for your work without alienating existing customers.

You phrase the new price as a question. Someone who sounds hesitant invites negotiation. State the price clearly, explain what your customer receives, and then be silent. You can find a detailed explanation of how to do this in conversation in the article Structuring the Sales Process.

A Higher Price Sells Better Than a Lower One

It’s often easier to sell a higher-priced offer than a lower-priced one. Customers buying lower-priced offers tend to be more impulsive, less likely to follow through, and more prone to complaining. Customers buying higher-priced offers think more carefully and are more likely to commit.

Here’s a simple calculation. To generate €100,000 in monthly revenue at a price of €500, you need exactly 200 customers. At €5,000, you need 20 customers. At €10,000, you only need 10. The same revenue, but significantly less effort.

The right question isn’t, “What are your customers willing to pay right now?” Instead, it’s: For whom is the result I deliver so valuable that my price seems insignificant in comparison? The answer depends on your target audience. I’ll explain why specialists command higher fees in the article Defining Your Target Audience. You can find information on how to demonstrate value before discussing price in the article Sales Psychology.

Finding the right price is more important than securing every single project. If you occasionally lose a project because your price is too high, that’s not necessarily a bad thing. The calculator will show you how many you can afford to lose.