Which billing model earns more?. The Retainer vs Hourly Calculator takes monthly retainer offered, hours the retainer will actually take per month, your hourly rate, billable hours you would otherwise sell per month and returns retainer minus hourly income plus better option, effective hourly rate on the retainer, monthly income billing hourly. 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 Retainer vs Hourly Calculator works
A retainer trades a lower effective rate for guaranteed income. Compare it with what you would realistically bill by the hour, not with your rate times a full month.
Worked example
With the example values (monthly retainer offered of $3,000, hours the retainer will actually take per month of 40 hours, your hourly rate of $85, billable hours you would otherwise sell per month of 30 hours), the retainer minus hourly income is $450.00; better option The retainer earns more (and is more predictable), effective hourly rate on the retainer $75.00, monthly income billing hourly $2,550.00. 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 retainer minus hourly income calculated?
compare retainer with hourly rate × billable hours; effective retainer rate = retainer ÷ hours it takes.
Which figures do I need?
Monthly retainer offered, hours the retainer will actually take per month, your hourly rate, billable hours you would otherwise sell 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.
