The short version
Price a retainer from the hours you will include and your normal rate, discount it for the commitment, and set the overage rate at your full rate. The overage rate is what stops a good arrangement quietly becoming a bad one.
Start from hours, not from a round number
A retainer that begins as a comfortable-sounding monthly figure and works backwards to the hours is a retainer you will resent by month four. Start from the hours the client actually needs and multiply by what you charge.
Twenty hours at $95 is $1,900. That is the honest starting point, and every adjustment after it should be deliberate rather than accidental.
Decide what the commitment is worth to you
The discount is not a courtesy, it is a price for something specific: guaranteed income you can plan around. Between 5% and 15% is common.
If the guarantee does not actually make your month more predictable, because the client is one of twenty or because they cancel freely, then it is worth nothing and zero is the right discount. There is no rule that says a retainer must be cheaper.
Set the overage rate at your full rate
This is where most retainers go wrong. The discount was for the hours the client guaranteed. Hours past the cap were never guaranteed, so they are worth your full rate.
Discounting the overage rewards the client for going over, which is exactly backwards, and it is how an arrangement that looked like $85.50 an hour at twenty hours quietly becomes far less at thirty.
Say what happens past the cap, before it happens
The failure mode is always the same. The client uses more than the cap, nobody wants to raise it mid-month, and three months later there is a pile of unbilled hours to argue about.
Writing the overage rate into the agreement removes the conversation entirely. Going over becomes a normal, priced event rather than an awkward one.
Do not let hours roll over
Rollover turns a retainer into a prepaid block of hours and removes the predictability you gave a discount for. It also builds a liability: a client who has banked forty unused hours can call them in during your busiest month.
If you do allow it, cap how many months can accumulate and say so in writing.
Check what you are actually earning
The number that matters is not the monthly fee, it is the fee divided by the hours you actually work, overage included. A retainer priced on twenty hours that reliably takes twenty-eight is a discount you did not agree to.
The retainer calculator shows that figure directly, so the arrangement can be repriced at renewal from evidence rather than from a feeling.
Questions people ask
How many hours should a retainer include?
The hours the client actually needs in a normal month, not a round number you worked backwards from. Pricing the hours first and the fee second is what keeps it honest.
What discount is normal on a retainer?
Between 5% and 15%, and zero is defensible. The discount buys predictable income. If the client's commitment does not actually make your month more predictable, it is not buying anything.
What should the overage rate be?
Your full undiscounted rate. The discount applied to guaranteed hours; hours past the cap were never guaranteed.
Should unused hours roll over?
Usually not. Rollover removes the predictability you discounted for and builds a liability you may have to honour in your busiest month. If you allow it, cap it.
How do I invoice a retainer?
One line for the retainer naming the hours included, and a separate line for any overage showing the hours and the rate. Keeping them separate makes the next renewal conversation straightforward.
When should I reprice a retainer?
At renewal, using what you actually earned per hour over the term rather than what the fee looked like. If the effective rate has drifted well below your normal rate, the cap is wrong, not the client.