This isn't strictly about Inkscape, so please remove if necessary, mods.

I have been approached by a new band to do the artwork and design for 7" record they want to put out. I have been illustrating for pleasure for a while, but this is my first commission and I have no idea how much to charge. I appreciate there's not a general rule of thumb for pricing, and I've done a bit of research but still at a loss as to what a good base price would be for this kind of thing. This will be first record cover, etc, I've designed, and it will be their first physical release I believe. So I am aware that we are helping each other out as new artists, and as such don't want to overprice. The design will be relatively simple - I do simple fineliner drawings, and the whole package (sleeve, lyric sheet, and labels) will be done like this.

Any ideas would be hugely appreciated. If this goes well I hope to do more commissions.

Hi.

It's never an easy part of the job to get paid just about right.
Much depends on the quality of your design and quantity of the effort put in. The latter can be priced, the rest is the "extra" if you get going I suppose.
Like if you charge more since your "brand" stands out on the market.

For a professional approach you need to write up how much do you need after taxes to pay to maintain yourself and your family, your work environment and other costs that keep you motivated as extra activities, hobbies, vacations and a bit of savings for the future.
Then, calculate your working hours, how much do you want to invest in such a profession.

From these two data you can see how much money you in need for your working hours.
Theoretically that would apply if you wanted to be a full time freelancer.
Assuming this project won't take a month work and that a starting band has a limited budget you need to find a common ground.
If they are "cheap", you have no choice but to limit your working time which is yet another hard part of the job. Without experience and taking notes on your speed it is usually underestimated how much time it needs to finish a project -since you like what you are doing, it doesn't automatically becomes a burden working "over time".

Then the other route would be looking at the competitors.
There are freelance specs sites like 99designs offering a fixed budget to a "winner" -depending on the number of competitors in a project that means in the long run you only get a small fraction or fall out of the game.
They have contests to design cover arts which they charge way more of the contest prize for contest holders.
Here is an example.
They charged €279 for the "bronze package" and paid $200 for the winner -out of the 20 contestants...
That means in an average a member can get about $10 for every project they submit work to and if counted by the targeted hourly wage it shouldn't take more than a few minutes coming up with a design.
Conclusion: avoid specs like the plague either if you are a designer or if you are seeking for a design. Real professionals shouldn't put in extra time so it means to them you are not a reliable businessman and won't take part either.
(No wonder most people on the site are from Indonesia.)

From these it seems $200 is a fair price to charge for both of you -compared to the mentioned site.
If that seems too much, compare it with the minimal hourly wage and with the number of hours you will work on your design.
Does your work worth more than digging? How much time is considered the limit you shouldn't work more?
-if you are a professional.

If not, consider the other benefits you might gain with the comission. I have bad experience on followup works and putting it into your portfolio just doesn't worth the extra effort alone.
Since they are a band they could offer copies of the CD and tickets to their playing which could also be considered as payment.
Not really that pays the bills, but the "extra" that you'd spend for otherwise.

The key on a fair or reasonable price as a professional is to be able providing the reasons why you charge that much and how much you value your time and service.

I would suggest that it's more important to write a contract than it is to agree on a price. The contract should be signed by both parties.

Of course you probably don't want to hire a lawyer at this point. But at least look online and find some kind of boilerplate contract that will cover your back. Otherwise, be prepared to work for free.

A simple agreement should suffice.

Seller will provide x, by date
Buyer will remit for x, by date
Additional terms for contingencies. ( likely overages, force-majure, optional work)
Penalties if buyer or seller delay or fail

I'd have the agreement clearly state ownership of copyright.

If I'm creating original "Artwork", I consider retaining copyright and selling exclusive license to the client, for use with just the layout.
If the artwork is desired for other merch, I add another agreement for flat fee and/or royalties.
If I'm mostly providing just a layout as a graphic designer, this is primarily work for hire.
Look at the fine print on some other bands' sleeves as copyright examples.