The formulas
- Fee in year k = current fee x (1 + increase)^(k - 1)
- Total = sum of the yearly fees
- Real change = fee at the escalation rate - fee at the inflation rate
How it works
A multi-year engagement letter can fix the first-year fee and an annual increase. This tool lays out the fee each year and compares the escalation with the cost increase you expect, so you can see whether the letter keeps pace with staff costs.
Year 1 is the current fee. Scope changes are separate from escalation; price them on their own and add them to the year they start.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
Should escalation follow an index?
That is a commercial choice. A fixed rate is simple to agree; an index tracks costs but makes the fee uncertain for the client.
Does this cover out-of-scope work?
No. Price scope changes separately so the escalation clause stays clean.
Formulas on this page are the standard definitions.
Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.