A retainer is a fixed monthly fee for a set block of your time. The client gets guaranteed availability and priority; you get predictable income. The price should reflect both sides of that trade, which is why most retainers are built from your normal rate plus a premium for keeping time reserved.
How it works
Multiply the hours you reserve each month by your standard hourly rate to get the base fee. Then add the availability premium: a 15% premium on a $1,500 base adds $225, for a $1,725 monthly retainer.
The effective hourly rate is the monthly fee divided by the reserved hours. It shows what each retained hour really earns, and it's the number to compare with your project rate.
A premium makes sense because reserved hours you can't sell to anyone else carry a cost, and the client is paying for fast response and priority. Some freelancers do the opposite and discount the rate in exchange for a long commitment. Enter a negative premium to model that.
Decide up front what happens to unused hours (do they expire or roll over?) and what extra hours cost. The rate for extra hours is your standard rate plus any uplift you set.
A worked example
You reserve 20 hours a month for an agency client at your $75 standard rate, with a 15% availability premium. The base is 20 × $75 = $1,500, and the premium adds $225, so the retainer is $1,725 a month. That's an effective $86.25 an hour, and a 6-month contract is worth $10,350.
Questions people ask
How do I calculate a monthly retainer fee?
Multiply the hours per month by your hourly rate, then add a premium for guaranteed availability. For example, 20 hours × $75 = $1,500, plus 15% = $1,725 a month.
Should a retainer be cheaper or more expensive than hourly work?
Both approaches are common. A premium pays you for reserving time and responding fast. A discount rewards a long, reliable commitment. Choose based on what the client values more: priority access, or a lower rate in exchange for a longer contract.
What happens to unused retainer hours?
That's up to your contract. Many retainers say unused hours expire at the end of each month, because you kept that time free. Others allow a limited rollover, such as up to 25% of the hours for one month. Write the rule down before the first invoice.
How many hours should a retainer include?
Base it on the client's typical monthly workload over the last few months, then round to a block that is easy to plan around, such as 10, 20 or 40 hours. Too few hours leads to constant overage billing; too many leads to unused time and a client who questions the value.
How often should I raise a retainer?
Review it at least once a year. Inflation alone erodes a fixed fee, so an unchanged retainer is a pay cut in real terms. The Retainer Inflation Adjuster shows how much a retainer has lost since it started.