Calculator
Retainer calculator
Enter the hours, your rate, the discount you give for commitment and what you charge for overage. The calculator returns the monthly fee, what the discount costs you over a year, and the range of monthly usage where a retainer is the right shape for both sides.
- Monthly fee
- Effective hourly rate
- Annual contract value
- What the discount costs you per year
- Client overpays below
- Move to a project above
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The monthly fee is included hours times your standard rate, less the commitment discount. Forty hours at $150 with a 10% discount is $5,400 a month and $64,800 a year. The discount is $600 a month, which is $7,200 a year you are paying for predictable revenue. Decide whether it is worth that much to you.
The retainer has a floor. If the client uses fewer hours than the fee would buy at your standard rate, they are overpaying, and they will work that out at renewal. In the example the floor is 36 hours a month.
It also has a ceiling. Every overage hour is billed above the standard rate, so each one eats into what the discount saved. Once the overage premium has used up the whole discount, the client is paying more than your standard rate for the month. At a $180 overage rate that happens at 60 hours. Past that point the extra work should be scoped and priced as a project.
What the result tells you to do
- Usage under the floor for two months running. Offer a smaller retainer before the client asks to cancel.
- Usage over the ceiling for two months running. The retainer is carrying a project. Write a scope of work for the extra and keep the retainer for what it was sold for.
- Overage rate at or below the standard rate. Nothing discourages the client from treating the retainer as unlimited. Raise it.
How to set the hours, the rollover rule and the notice period is in retainer pricing. The contract that holds it together is the retainer agreement template.