How to Add a CPI Clause to Your Trash Hauling Contract
Stop having awkward price-increase conversations. Put it in the contract up front so your rates go up automatically every year.
A CPI clause is one sentence in your contract that raises your rates with inflation automatically every year. Trash CPI averages 4–5% per year. The clause means you don’t have to call every customer and explain a rate hike — they agreed to it when they signed up. Copy-paste language is below.
What is a CPI clause?
A CPI clause is one sentence in your contract that says: “Your rate goes up each year based on how much costs have gone up.”
The “CPI” (Consumer Price Index) is a number the government publishes every month. It tracks how much things cost. There’s one specifically for water, sewer, and trash collection— that’s the one you want.
With this clause, you don’t have to call every customer and explain why you’re raising prices. They agreed to it when they signed up.
How much does the Trash CPI go up each year?
Here’s what the government data shows for average annual increases in trash, water, and sewer costs:
Last 3 years
4.3%/yr
2023 – 2026
Last 5 years
4.6%/yr
2021 – 2026
Last 10 years
4.0%/yr
2016 – 2026
If you charge
per month:
Based on 3-year avg (4.3%)
Annual raise = $1.29/mo
New rate = $31.29/mo
Based on 5-year avg (4.6%)
Annual raise = $1.37/mo
New rate = $31.37/mo
See year-by-year breakdown
| Year | Trash CPI | Change |
|---|---|---|
| 2014 → 2015 | 214.0 | +4.2% |
| 2015 → 2016 | 221.7 | +3.6% |
| 2016 → 2017 | 229.1 | +3.3% |
| 2017 → 2018 | 237.1 | +3.5% |
| 2018 → 2019 | 244.7 | +3.2% |
| 2019 → 2020 | 252.5 | +3.2% |
| 2020 → 2021 | 261.5 | +3.6% |
| 2021 → 2022 | 273.2 | +4.5% |
| 2022 → 2023 | 288.1 | +5.5% |
| 2023 → 2024 | 302.4 | +5.0% |
| 2024 → 2025 | 317.0 | +4.8% |
| 2025 → 2026 | 327.0 | +3.2% |
That means if you add a CPI clause to your contracts, your rates will go up about 4–5% per year automatically. On a $30/month customer, that’s roughly $1.20–$1.50 more per month each year. Small enough that nobody cancels, big enough that you keep up with costs.
Sample CPI clause you can copy into your contract
Here are two versions — pick whichever fits your business. You can copy these word for word.
“Rates will be adjusted once per year on [January 1/ your anniversary date]. The adjustment will equal the percentage change in the Consumer Price Index for Water, Sewer, and Trash Collection Services (U.S. Bureau of Labor Statistics, series CUSR0000SEHG) over the prior 12 months. Rates will not decrease. Customer will receive 30 days written notice before any adjustment takes effect.”
“On each anniversary of this agreement, the monthly service rate shall be adjusted by the annual percentage change in the Consumer Price Index for Water, Sewer, and Trash Collection Services (BLS series CUSR0000SEHG), subject to a minimum increase of 2% and a maximum increase of 8% per year. The CPI value published for September of each year shall be compared to the September value of the prior year. The adjusted rate takes effect on January 1 following that comparison. The rate shall not decrease below the prior year’s rate.”
Which option should you use?
| Option 1 (Simple) | Option 2 (Floor & Cap) | |
|---|---|---|
| Best for | Residential customers | Commercial / multi-year deals |
| Min raise | 0% (whatever CPI says) | 2% guaranteed |
| Max raise | No cap | 8% cap |
| Easier to explain | Yes | Takes a bit more explaining |
How to calculate the yearly increase (step by step)
Once a year, you need to look up the CPI and do some quick math. Here’s exactly how:
- Go to the FRED website. Click here — it’s free. Look at the most recent number. That’s today’s CPI.
- Find last year’s number. On the same page, hover over the chart to find the value from the same month last year. Or use our calculator to do the math for you.
- Do the math.Subtract last year from this year, divide by last year, multiply by 100. That’s your percentage increase.
- Apply it.Multiply your current rate by that percentage. That’s the new monthly rate.
Real example with real numbers
Say you charge $30/month and it’s time for your annual CPI adjustment:
Trash CPI this September: 319.9
Trash CPI last September: 305.1
Percentage change: (319.9 − 305.1) ÷ 305.1 = 4.85%
New rate: $30.00 × 1.0485 = $31.46/month
That’s a $1.46 raise. Most customers won’t even notice.
When should you send the rate increase notice?
- Pick one date every year. January 1 is the most common. Some haulers use their business anniversary.
- Look up the CPI in October or November(use the September number — it’s the most recent full data available by then).
- Send notices in November or December — at least 30 days before the new rate starts.
- New rate takes effect January 1. Done for the whole year.
Sample rate increase letter you can send to customers
Here’s a simple letter you can copy. Change the names, dates, and numbers to match your business. Send it by mail, email, or text — at least 30 days before the new rate starts.
Dear [Customer Name],
Thank you for being a valued customer of [Your Company Name]. We appreciate your continued trust in our service.
We are writing to let you know that effective [Date — e.g. January 1, 2027], your monthly service rate will be adjusted from [Current Rate — e.g. $30.00] to [New Rate — e.g. $31.50] per month.
This adjustment reflects the increase in operating costs including fuel, disposal fees, insurance, and equipment maintenance. According to the U.S. Bureau of Labor Statistics, the cost of trash collection services has increased approximately [X]% over the past year.
We work hard to keep our prices fair while continuing to provide the reliable, on-time service you count on. This is the first rate adjustment in [X months/years].
If you have any questions, please don’t hesitate to reach out at [Phone Number] or [Email].
Thank you for your understanding and your business.
Sincerely,
[Your Name]
[Your Company Name]
Hi [Name], this is [Your Name] from [Company]. Just a heads up — starting [Date], your monthly rate will go from $[Old] to $[New]. This covers the rise in fuel, dump fees, and insurance costs this year. We appreciate your business! Questions? Call or text us at [Phone].
Tips from haulers who use CPI clauses
- Put it in every new contract starting today.You can’t go back and change old ones, but every new customer should sign with this clause.
- Use “will not decrease” language.If inflation drops to zero one year, you don’t want to be forced to lower your rate.
- Keep it simple for residential.Option 1 is easy to explain: “Your rate goes up once a year based on what the government says costs went up.”
- Use the floor/cap for commercial. Businesses expect it. A 2% floor means you always get something. An 8% cap gives them comfort.
- Round up to the nearest quarter. Nobody wants to see $31.46 on a bill. Round to $31.50. Easier for everyone.
Bottom line
Every year you don’t raise your rates, you’re giving yourself a pay cut. A CPI clause fixes that automatically. Copy one of the clauses above into your contract template today, and you’ll never have to have that awkward “I need to raise your price” phone call again.
Already behind on your rates?
Use our free calculator to see what you should be charging right now.
Data source:U.S. Bureau of Labor Statistics, CPI for Water and Sewer and Trash Collection Services (CUSR0000SEHG). Sample contract language is for reference only — have your attorney review before using in binding agreements.