Monthly retainer from scope & margins. The Agency Retainer Calculator takes hours in the monthly scope, internal cost per hour (salaries, overhead), target margin, tools and pass-through costs per month and returns monthly retainer plus monthly delivery cost, effective hourly rate. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
For freelancers and agencies the scarce resource is billable time. Pricing has to cover unpaid hours, tools, taxes and time off, not just the hours a client sees on an invoice. Use the worked example below to check the maths against your own figures.
How the Agency Retainer Calculator works
Build the retainer up from what the scope costs to deliver, then gross it up to the margin the agency needs. Quoting from the client's budget downwards is how retainers end up unprofitable.
Worked example
With the example values (hours in the monthly scope of 60 hours, internal cost per hour (salaries, overhead) of $45, target margin of 40%, tools and pass-through costs per month of $300), the monthly retainer is $5,000.00; monthly delivery cost $3,000.00, effective hourly rate $83.33. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is monthly retainer calculated?
retainer = (hours × cost per hour + tools) ÷ (1 − target margin).
Which figures do I need?
Hours in the monthly scope, internal cost per hour (salaries, overhead), target margin, tools and pass-through costs per month. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
How do I choose the target income or margin?
Start from what you need to earn after tax and expenses, add a margin for unpaid time (sales, admin, holidays, slow months) and check the resulting rate against what your market pays.
