Calculate retainer pricing with guaranteed hours, rollover policy, discount vs hourly rate, and annual revenue projection.
A retainer trades your rate card for predictability: the client pays a fixed monthly fee for a guaranteed number of hours, and you give up part of your rate for committed cash flow. Enter your standard hourly rate, the monthly hours you guarantee, the discount you offer, and your rollover rule. The tool returns the monthly retainer fee, the effective hourly rate the client pays, and a 12-month revenue projection. The figure people misread is that effective rate: when hours go unused and do not roll over, the client pays the full fee for hours never delivered, so each hour actually worked costs more than your standard rate.
A concrete input and expected output from the current implementation.
Input
Hourly rate: $120 | Guaranteed hours per month: 20 | Discount: 10% | Rollover: none
Expected output
Monthly retainer fee: $2,160. Effective hourly rate: $108 (10% below the $120 rate card). Annual revenue: $25,920. Rollover: none, so hours under the 20-hour guarantee are forfeited each month.
20 hours at $120 would bill $2,400 at the rate card; a 10% discount makes the monthly fee $2,160, which is $108 per guaranteed hour, and twelve months of that fee total $25,920. The per-hour figure moves if usage falls short: at 15 hours used in a month, the fee works out to $144 per delivered hour.
The monthly fee is guaranteed hours times your standard rate, minus the discount you set. The effective rate is the fee divided by the guaranteed hours, so it shows what the retainer costs per hour versus the rate card. Quote this number rather than the discount: the percentage says nothing about what the fee buys, because the value per hour depends on how much of the guarantee the client uses.
Unused hours either expire at month end or carry into the next month, depending on the rollover policy you set, and a cap, if you set one, limits how large the carried balance can grow. The annual revenue projection multiplies the monthly fee by twelve, assuming the retainer renews and the client pays every month, so treat it as a ceiling rather than a forecast.
Only if the client banks hours. Carried hours are work you owe later at the discounted retainer rate, so a client who uses less than the guarantee for months and then draws it down can make your effective rate lower than the nominal one. A cap on carried hours, such as one month's worth, contains the exposure; if the client typically uses close to the guarantee, rollover costs you little.
The tool cannot answer that; it converts whatever discount you enter into an effective rate, and where it lands is your call. A practical way to use it: decide the lowest rate you would accept for guaranteed hours, then raise the discount until the effective rate meets it. The projection then shows what that concession is worth over a year, the number to weigh against committed cash flow.
The example and behavioral notes were checked against the browser implementation. Standards and primary references below define the relevant format, formula, or platform behavior.
Calculate gross, operating, and net profit margins from cost and revenue with breakeven analysis.
Convert between annual salary and hourly rate with adjustments for work hours, overtime, and benefits.
Calculate sales tax amounts, tax-inclusive and tax-exclusive prices for any tax rate or jurisdiction.
Calculate return on investment from initial cost and final value with annualized ROI and comparison tables.
Convert between markup and margin percentages, calculate selling price, and compare pricing strategies.
Convert numeric amounts to written words for invoices, checks, and legal documents in multiple currencies.