Retainer Fee Calculator
The effective hourly rate on a monthly retainer, the hours it really covers, and what it should cost at your target rate.
Effective hourly rate
$139
$2,500 for 18 hours
Hours covered at $150/h
16.7 h
1.3 h delivered beyond that
Retainer should be
$2,700
for 18 h at your target rate
How do you calculate the effective hourly rate on a retainer?
Divide the monthly retainer by the hours you actually delivered that month. A $2,000 retainer with 12 hours of work is $167 an hour. The same retainer with 25 hours of work is $80 an hour. The retainer did not change. Your rate did, and most people never notice because the invoice looks the same every month.
That is why effective rate, not the retainer amount, is the number to watch. It tells you whether a client is paying for your best work or quietly getting a discount. TimerMVP calculates it for every retainer client automatically from the hours you track.
How many hours should a retainer include?
Work backwards from your target rate. If you want $150 an hour and the client pays $3,000 a month, the retainer covers 20 hours. Write that number into the agreement, along with what happens above it. Unlimited retainers without a defined scope are where effective rates go to die.
Then track against it. Some months you will deliver 14 hours and some months 26. The average over a quarter is what matters, and whether the months above the line are the result of real scope growth, which deserves a conversation, or small favours that never got a number attached.
When should you renegotiate or end a retainer?
Three signals. The effective rate has been below your target for three months running. The client has gone quiet, paying but not using the hours, which feels fine until they cancel with a complaint about value. Or the retainer is such a large share of your income that losing it would be a crisis, in which case the problem is concentration, not the client.
TimerMVP flags all three on the dashboard: effective rate per client, quiet paying clients, and top-client concentration. The calculator here gives you the first one for a single client. The habit of checking it monthly is what protects your rate.
- Effective rate below target for a quarter: raise the retainer or cap the hours
- Hours far below the retainer: check in before the client decides it is not worth it
- One client above roughly a third of income: go find the next one before you need to
Know every retainer's real rate, every month.
Track the hours and TimerMVP does this calculation for each retainer client on the dashboard, and flags the ones that have gone quiet.
Start free, no card requiredOr see every free tool