Retainer vs. Hourly Comparison Calculator
Compare a flat monthly retainer fee against what the same work would cost billed hourly, based on your expected monthly hours.
Break-even is the number that matters
The comparison is one multiplication against one flat fee, plus the hours at which the two meet:
hourly total = expected hours × hourly rate
difference = |retainer - hourly total|
break-even hrs = retainer ÷ hourly rateA $2,000 retainer against 30 hours at $75 gives an hourly total of $2,250, so the retainer is $250 cheaper and break-even sits at 26.7 hours. Work fewer than 26.7 hours and the retainer pays you more than the clock would have; work more, and you are subsidising the client.
Read "cheaper" from the right side of the table
The Cheaper Option row is written from the buyer's point of view. When it says Retainer, it means the client pays less - which is the same month in which you earned less per hour. Your side of it is the effective rate, the fee divided by the hours you really worked:
| Hours worked | Effective rate on a $2,000 retainer |
|---|---|
| 20 | $100.00 |
| 26.7 | $75.00 (break-even) |
| 30 | $66.67 |
| 40 | $50.00 |
Some discount is reasonable: a retainer buys predictable income and a booked slot in your calendar. The danger is that it has no ceiling. Write the included hours into the agreement, say what happens to overflow - usually billed hourly - and state whether unused hours roll over or expire - a client who assumes they roll will bank three quiet months and spend them in one.
Frequently asked questions
What is the effective hourly rate of a retainer?
The fee divided by the hours you worked for it. $2,000 for 30 hours is $66.67 an hour, an 11% discount against a $75 rate.
How many hours should a $2,000 monthly retainer include?
At a $75 rate the arithmetic breaks even at 26.7 hours. Include fewer and the discount is small; include noticeably more and you are pricing your time below your own rate.
Is a retainer better than hourly billing for a freelancer?
It trades money for certainty. Guaranteed income smooths the gaps between projects, and the price is a lower rate whenever the month runs busy - which is why the cap and overflow terms carry the risk.