How much should I charge for tutoring in 2023?

When you start a tutoring business or side-hustle, you need to set a competitive rate. In this post, we will answer common questions about setting your prices, evaluating your worth as a tutor, and making adjustments as you progress

Make sure to read our guide on starting a tutoring business first if you’re just beginning. It may also be worth reading our post that discusses the best subjects to tutor online, since the subject you choose to tutor can have a significant impact on the rate you earn. Finally, we also have a guides on marketing a tutoring business or side hustle and writing a tutoring advertisement

📂 Pricing models

⏳ Hourly rates

The most common pricing model for private tutors is an hourly rate, generally between $40 and $120 per hour. This provides flexibility and allows you to gauge the demand for your services so you can adjust your prices in the future. Handling payments is easier with this model, and it accommodates unforeseen circumstances such as missed sessions or other commitments

In group tutoring, you can follow the same approach of charging each student an hourly rate. Sometimes it’s beneficial to be flexible on the hourly rate, when it’s at your discretion. Occasionally, staying an additional 5-10 minutes without charging can leave a positive impression and potentially lead to referrals or testimonials, which can contribute to long-term revenue growth. However, this must be at your discretion only. If parents or students refuse to pay for additional time and insist that staying longer without being paid is an expectation, that is not acceptable and should be addressed promptly. Genuinely caring about your student’s success goes a long way, and these actions demonstrate your commitment, which they will appreciate and acknowledge

🎁 Package deals

Package deals are beneficial for experienced and established tutors who have more time and resources to offer. Examples of this model include students paying a reduced rate for booking a longer time period upfront or participating in intensive “boot camp” style tutoring during school holidays

In Australia, this typically requires operating through an Australian Business Number (ABN) which involves official documentation and comes with administrative tasks such as generating receipts. If you’re considering the boot camp route, test the demand by advertising and securing signups with a small deposit before committing to purchasing software licenses, obtaining financial assistance, and incorporating an ABN

If you’re implementing this strategy for a private student as a revenue-securing measure, you may be able to bypass the administrative requirements since you already have a personal relationship with the student

📺 Subscription rates

Subscription models are suitable for established companies that have resources and financial accounting assistance. Students pay a monthly or yearly subscription fee, for a set number of tutoring lessons within a period and access to additional learning resources. If you’re a private tutor interested in this model, keep an eye on Kedyou. We’re brainstorming ideas to enable private tutors to offer subscription services for resources and notes, albeit a while away. For now, it’s best to leave this pricing model to companies that are better equipped to handle the administrative aspects associated with it

💰 How should I charge for tutoring?

Tutoring rates in Australia are usually between $40 to $120 per hour. Specialized tutors for subjects like UMAT or GAMSAT can start at the higher end of this range. Initially, match the rates of other tutors with similar experience and qualifications teaching the same subject

You can try to undercut prices by a small margin to attract more students but beware of undercutting too heavily because you may end up implicitly signalling that you’re providing lower-quality services. If you want to undercut the market rate, do so by 5-10%

Most educators and tutors undervalue themselves, so if you have two ideas about how to price, start at the higher end and see how that goes, you can always adjust it later

When setting your rate, establish your preferred payment method and payment timeframe, and clearly communicate it to your potential students. By sorting out these details in advance, you can prevent any potential confusion or delays when it comes to receiving payment for your tutoring services

⚖ Adjusting pricing

Pricing isn’t a one-time decision, and as your tutoring ability and experience adapt, your pricing should too. As you gain experience and confidence, you can refine your pricing strategy to reflect your growing expertise or target specific groups of students

Before you adjust your pricing or open up to new models, start building a bank of referrals and testimonials from satisfied students or parents. Testimonials from third parties add social proof to your claims, and word-of-mouth recommendations are a powerful way of getting new students. As you accumulate more experience and receive favourable testimonials, you can start using your growing reputation to take more control of your pricing strategy

Another effective technique is to strategically increase your prices to signal implicit quality to potential students. Once you have gained relevant qualifications and experience, consider increasing your prices toward the higher end of the spectrum. This communicates that your tutoring services offer superior quality. However, this approach should only be implemented after you have established a significant amount of experience and credibility and are able to deliver the high-quality service that justifies the higher rate. Otherwise, a lack of quality will show quickly and damage your credibility

Another way to adjust pricing is by exploring different models, such as group tutoring. As your reputation and referrals grow, you can open up group tutoring sessions to make the most of your time while offering a reduced price for your students. Offer a 5-15% discount on the price for each additional student in the group. For instance, if you charge $50 for one student, you could offer a rate of $40 per student for two students and further reduce it to $35 per student if three students join. Group pricing makes tutoring more affordable for everyone involved and encourages students to bring their friends or classmates. Additionally, learning with friends can create a more enjoyable learning environment for all students

👨‍💻 Use new technology to save time and money

Technology can greatly enhance your tutoring by saving time and improving the learning experience for your students. Leverage AI-based Language Models (LLMs) like ChatGPT to create valuable resources and question banks. Moving your tutoring to a dedicated online workspace like Kedyou can effectively engage your students, especially when distance is a factor. This enables you to easily bring together students who are far away from each other into group sessions, allowing you to give them discounts and optimize your time and expenses on commuting. By embracing these new technologies, you gain a competitive edge over other tutors in terms of time efficiency. For extra points, encourage your students to highlight the added value they receive from your tech-enabled approach in their testimonials

📈 How to increase your hourly rate for tutoring

Before thinking about increasing your prices, ensure that you are already delivering value to your students. Take an honest look at your tutoring sessions and assess whether you are meeting the needs and expectations of your students. Only consider adjusting your pricing when you are certain that your services consistently meet and exceed your student’s expectations

When increasing your rates, always strive to offer much more value to your students than the amount you raise. Communicate the additional benefits and improvements they can expect from your tutoring sessions. Highlight any updates, enhancements, or additional resources you have introduced to improve their experience. By being transparent you can help your students feel they are receiving a fair exchange for the increased price

🤔 Did you initially undervalued yourself?

If you have initially undervalued yourself and feel that your current rates do not reflect your expertise, have an open and honest conversation about it with your students. Be transparent about the disparity between the expertise and value you bring to the table and the current price. When discussing the new price, reference a price range that similar tutors charge. For instance, if you currently charge $40 per hour, but your expertise warrants a rate of $70-$90 per hour, say something like, “Tutors with similar experience typically charge between $70 and $90 per hour.” Your clients will gravitate towards the lower end of the range, but hearing a related range is less abrupt and jarring than hearing a specific number

Communicate honestly about the potential opportunities you may be passing up by charging a lower rate. Explain that in order to continue providing them with the best service, you need to adjust your rate accordingly. Remind your students that your ultimate goal is to help them succeed and provide the best possible learning experience. By being transparent about your pricing adjustments and tying them back to their experience and your commitment to their success, you display your dedication to helping them achieve their goals

💪 Give students an adjustment period

When increasing prices, be prepared for some students to seek tutoring elsewhere. Give your students notice of the upcoming price increase and maintain the current rate for a specific period, usually two sessions or a set timeframe. This gives them time to think, adjust and find another tutor if they wish to without disrupting their learning. During this transition period, assure them that if they decide to find another tutor, there are no hard feelings, and you will continue to support them to the best of your abilities

🚀 Turn it into an opportunity for your students

You can use a rate increase to offer incentives or discounts. For example, you can waive the raise for students who pay for a long period upfront, like six months of tutoring. This helps both you and the students because you get the money earlier, which you can use to advertise and get more students, while the students can maintain the current price. You can also waive the rate increase if a student refers two or more new students to your tutoring services

You should also consider offering group tutoring services to individual students. This works especially well for online tutors since physical proximity is not a requirement. If you have two interested students, you can combine their sessions into a group setting. For example, if you plan to raise your rate from $50 to $60 per hour, you can offer to maintain the current rate of $50 per hour or even reduce it to $45 per hour if the student agrees to participate in a joint session with another student. This benefits both parties, as students receive a lower rate while still receiving quality tutoring, and you can maximize your time by tutoring multiple students at once

🛑 Avoid increasing prices during high-stress periods

Remember to be thoughtful and avoid raising prices during busy periods like exams or important dates. Your student’s success is your own success, so it’s crucial to make sure they feel supported and not taken advantage of. Focus on providing exceptional service throughout the transition, keeping their progress and well-being as a priority. By showing your commitment to their success, they will be more understanding and receptive to the price increase

🤴 Negotiating rates with parents

Sometimes, parents may try to negotiate your tutoring rates. If you have already set your rates carefully, considering factors like similar tutors and your expertise, don’t negotiate. Stick to your rate and be confident in your worth. If a parent or student doesn’t agree with your rate, it’s okay to walk away. Don’t underestimate yourself or compromise the value of your skills and knowledge. Your time and expertise are valuable, and you should be fairly paid for your services

Remember, as a tutor, you deserve to be compensated fairly for your time and expertise. Set your rate confidently, stand by it, and establish clear payment terms to ensure a professional and hassle-free experience for both you and your students