The retainer formula (capacity × pricing guardrails)

A good retainer is not “hours × rate” — it’s a monthly partnership price that covers your time, protects your calendar, and keeps the engagement healthy. This calculator uses a simple, transparent model you can explain.

• Billable hours/month = (billable hours/week) × 4.33
• Realistic billable hours = billable hours/month × (utilization %)
• Utilization captures sales time, admin, context switching, and “life.”

• Revenue floor = target income + overhead
• Overhead includes software, contractors, rent, taxes set-asides, tools, insurance, etc.

• Profit makes your work sustainable (and funds growth).
• Buffer covers scope creep, stakeholder churn, and “quick asks.”
• Adjusted revenue goal = revenue floor × (1 + profit%) × (1 + buffer%)

• Recommended retainer/client = adjusted revenue goal ÷ number of clients
• Included hours/client = realistic billable hours ÷ number of clients
• Effective hourly = retainer/client ÷ included hours/client

• Higher complexity increases the suggested price slightly because coordination and uncertainty cost real time.
• This tool adds a small uplift (0–18%) based on the complexity selector.

Frequently Asked Questions

• What utilization rate should I use?

  Many solo freelancers land between 50–75%. If you handle sales, delivery, admin, and context switching, 70% is often realistic. Agencies with ops support can push higher.

• What’s a good buffer percentage?

  If your work is stable and repeatable, 10–15% may be enough. For leadership, fast-moving startups, or unclear scopes, 20–35% protects your time and reduces “silent overtime.”

• Should I price hours-based or value-based?

  If the client understands hours, an hours-based retainer is easiest. If outcomes matter more than time (strategy, leadership, revenue impact), value-based often wins. Hybrid is common: include a floor of hours, price above it for priority.

• What if a client uses fewer hours one month?

  Retainers are about access and capacity reservation, not minutes. You can allow small rollovers (e.g., up to 25%), but avoid turning retainers into time-tracking subscriptions unless that’s your model.

• Is this price “final”?

  Treat it as a strong starting point. If the client’s urgency is high, access is daily, or meetings are heavy, the effective hourly should rise. If the scope is narrow and repeatable, you may lower the buffer.

How to use the number (and make it go viral)

Here’s the simple truth: most retainers fail because expectations are vague. If you want a client to happily pay every month, your offer has to make two things obvious: what they get and what it prevents. Use the calculator’s output to write one sentence like:

• Standard Retainer: “For $X/month, you get Y hours of priority delivery + a clear scope and response time.”
• Outcome add-on: “If we hit the KPI by Z, we extend with a quarterly performance bonus.”

• Scope: 3–5 bullets (deliverables + meeting cadence).
• Access: response time, channels, and office hours.
• Boundaries: what’s out of scope + change request process.
• Rollover: optional (cap it), or trade unused hours for a quarterly workshop.

Want “shareable” results? Screenshot your tier table, post it with one line: “I used a retainer formula instead of vibes — here’s my monthly quote.” People share frameworks.

Three realistic scenarios (with numbers)

Examples make pricing feel “real” — and they help you sanity-check the result. Below are three common retainer setups. You can recreate them by moving the sliders.

• Target income: $10,000/mo · Overhead: $1,500/mo
• Billable hours/week: 20 · Utilization: 70%
• Profit: 25% · Buffer: 15% · Clients: 2
• Outcome: Each client lands near a mid four‑figure retainer with ~30 hours/month included (depending on complexity).

• Target income: $18,000/mo · Overhead: $2,500/mo
• Billable hours/week: 25 · Utilization: 75%
• Profit: 30% · Buffer: 25% · Clients: 1
• Outcome: One “primary” client pays for priority access. Your effective hourly rises because complexity + buffer are higher.

• Target income: $25,000/mo · Overhead: $8,000/mo
• Billable hours/week: 35 · Utilization: 80%
• Profit: 20% · Buffer: 10% · Clients: 4
• Outcome: Lower buffer (repeatable delivery) + more hours, split across clients → steadier mid‑tier retainers.

If your result feels “too high,” don’t automatically lower it — first check whether your utilization is too optimistic or your overhead is undercounted. Underpricing is usually a math error disguised as humility.

Make retainers healthier (for you and the client)

The fastest way to lose money on a retainer is to let it become a dumping ground for random requests. A strong retainer has rules that make everyone calmer.

• Response time: e.g., 24–48 hours for Standard, same‑day for Premium.
• Meeting cap: limit recurring calls, or define a monthly meeting budget.
• Change requests: new initiatives trigger a scope conversation (not “sure!”).
• Unused hours: either do not roll over, or cap rollover to a small %.
• Exit clause: 30‑day notice prevents surprises.

This calculator’s buffer is your guardrail in numeric form — but written guardrails make the buffer real.