Retainer Pricing Calculator
Price a monthly retainer and the rate for hours beyond it.
What this calculator does
The discount and every rate are entered by the firm. When no overage rate is given the standard rate is shown, and the profit line is left uncalculated unless a delivery cost is entered.
Inputs and what they mean
- Currency
- — Amounts are shown in the currency you pick. No exchange rate is applied..
- Hours included each month
- — number value.
- Standard rate per hour
- — number value.
- Retainer discount (optional)
- — Optional component. Leave at 0 to exclude it from the result..
- Rate for hours beyond the retainer
- — Optional. Leave at 0 to use the standard rate..
- Monthly cost to deliver the retainer
- — Optional component. Leave at 0 to exclude it from the result..
How to use it
- Enter your own figures — the calculator never fills in a rate, price or benchmark for you.
- Press Calculate to see the result.
- Read the formula, variables, assumptions and source below the result before you rely on it.
Formula
Retainer fee = Included hours × Standard rate × (1 − Discount); Effective rate = Retainer fee ÷ Included hours
Worked example
40 hours a month at $150 with a 10% retainer discount
The discount is applied to the standard rate you entered.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
Results depend entirely on the figures you enter and are rounded for display. They are for general information and education, not professional advice.
Reference: Rice University — Principles of Accounting, Volume 2: Managerial Accounting
Last reviewed:
Common questions
Formula, source and verification
The retainer is the discounted value of the hours it reserves, with the effective rate shown so the discount is explicit.
The question it answers: What should a monthly retainer cost, and what do extra hours cost?
The formula
Retainer fee = Included hours × Standard rate × (1 − Discount); Effective rate = Retainer fee ÷ Included hours
- H — Included hours
- (h). Hours reserved each month.
- R — Standard rate
- (currency/h). Rate charged outside a retainer.
- d — Retainer discount
- (%). Optional discount for committing to the retainer.
- V — Overage rate
- (currency/h). Optional rate for hours beyond the retainer.
- K — Monthly delivery cost
- (currency). Optional cost of delivering the retainer.
Units: Hours; currency per hour; currency; percentages.
What kind of calculation this is
Business input model. The answer depends on business figures only you can supply, such as your own costs, rates or volumes. No market or benchmark values are assumed for you.
Method
The discount and every rate are entered by the firm. When no overage rate is given the standard rate is shown, and the profit line is left uncalculated unless a delivery cost is entered.
Assumptions built into the result
- Mathematical: The included hours are reserved whether used or not.
Figures this calculator will never guess for you
- No industry-average rate, margin, overhead or ticket volume is inserted.
- No optional component is filled in on the user's behalf.
- No standard retainer discount is assumed.
Limitations
- Prices the commitment, not the value delivered; unused hours policy has to be agreed separately.
Source and version
- Standard or reference
- Cost accumulation, cost-plus pricing, margin and markup (OpenStax, Principles of Accounting Volume 2: Managerial Accounting — job order costing, cost-plus pricing, margin and markup.)
- Published source
- Rice University — OpenStax (CC BY)
- Formula version
- Version 1
- Verification
- Reviewed against the cited source on
- How much weight the source carries
- Academic
- Applies to
- Currency
- Amounts stay in the currency you choose; no exchange rate is applied.
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