TidyToolsHow to compare a retainer to hourly work
A retainer is only a good deal if the hours stay under control. Divide the monthly fee by the hours you're committing, and you get your effective hourly rate. If that's at or above your normal rate, the retainer works in your favour. If the scope quietly grows, your effective rate drops — and there's a point (the break-even hours) where you'd have earned more just billing hourly.
Enter the retainer, the hours committed, and your normal rate. The calculator shows your effective rate, how it compares to hourly, and the maximum hours you can work before the retainer starts underpaying you.
What makes a retainer worth it
- Predictable income — a guaranteed monthly amount smooths out slow months.
- A capped scope — the hours are defined and enforced, so effort doesn't drift.
- An effective rate at or above your hourly — otherwise you're subsidising the client.
- A rollover or overage clause — unused hours carry over, or extra hours get billed.
Frequently asked questions
How do I calculate my effective retainer rate?
Divide the monthly retainer by the number of hours you commit to. If a $2,000 retainer covers 30 hours, your effective rate is about $67/hour.
Should I charge more or less on a retainer?
Many freelancers accept a slightly lower effective rate in exchange for guaranteed, predictable income — but only if the hours are capped. Without a cap, a retainer can pay far less than hourly.
What are break-even hours?
It's the number of hours where the retainer equals what you'd earn billing hourly. Work more than that and the retainer underpays you; work fewer and it pays better than hourly.