Price the overage before you need it
The failure mode of every retainer is the same. The client uses more than the cap, nobody wants to raise it mid-month, and by the time it is raised there are three months of unbilled hours to argue about.
Setting the overage rate in the agreement removes the conversation. It is not a penalty, it is what an hour costs once the discounted block is used, and stating it up front makes going over a normal event rather than a dispute.
Do not discount the overage
The commitment discount exists because the client guaranteed the hours. Hours over the cap were never guaranteed, so they are worth your full rate. Discounting them rewards the client for going over, which is exactly backwards.
The effective rate row shows what happens when this goes wrong: a retainer that looks like $85.50 an hour at twenty hours becomes considerably less if overage is discounted and the client routinely runs to thirty.
Be honest about expected hours
The expected hours field is the one people flatter. If you know the client will use twenty-four, put twenty-four in and the page will show what you are actually earning. A retainer priced on hours nobody believes is a discount with extra steps.
Related calculators
- Billable hours calculatorWhat is left to sell after time off and unpaid work
- Hourly invoice calculatorHours and a rate, into a total
- Setting a retainerIncluded hours, the discount, and the overage rate
Questions people ask
How do I work out a monthly retainer?
Multiply the hours you will include by your hourly rate, then apply whatever discount the commitment is worth to you. Twenty hours at $95 with 10% off is $1,710 a month.
What discount should I give on a retainer?
Between 5% and 15% is common, and zero is defensible. The discount buys predictable income; if the client's guarantee does not actually make your month more predictable, it is not buying anything.
What should I charge for hours over the cap?
Your full undiscounted rate. The discount was for the hours the client guaranteed; hours beyond the cap were never guaranteed. Discounting them rewards going over.
Should unused hours roll over?
Usually not, and say so in the agreement. Rollover turns a retainer into a prepaid block and removes the predictability you discounted for. If you allow it, cap how many months can accumulate.
What is the effective hourly rate on a retainer?
The fee divided by the hours actually worked, including any over the cap. It is the only number that says whether the arrangement works, and it is often well below the headline rate.
How do I invoice a retainer?
One line for the retainer naming the hours it includes, and a separate line for any overage with the hours and the rate shown. The button under the result builds exactly that.