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Retainer vs Hourly Calculator

Model a fixed service retainer with included hours and an overage rate against straight hourly billing for the same work.

34 / PRICE THE SAME WORKLOAD

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Starting values are illustrative. Use your own costs, rates and assumptions.

INPUT GROUP 01

Fixed-package terms

INPUT GROUP 02

Comparable hourly engagement

Check the assumptions before acting on a result.

Read the method and example

YOUR CALCULATION

The entered retainer package costs less at this workload.

Retainer plus overage cost

$3,750.00

Straight hourly cost

$4,375.00

Absolute cost difference

$625.00

Hours above the package

5

Only positive hours above the allowance incur overage.

Unused included-hour allowance

0.00%

Retainer effective cost per used hour

$150.00

Workload sensitivity

Workload sensitivity
Hours usedRetainer plus overageHourly billingRetainer minus hourly
0 hr$3,000.00$0.00$3,000.00
20 hr$3,000.00$3,500.00-$500.00
25 hr$3,750.00$4,375.00-$625.00
50 hr$7,500.00$8,750.00-$1,250.00

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Illustrative inputs loaded. Replace them with your own assumptions.

How the retainer vs hourly calculator works

This model assumes a fixed service-package charge that is not refunded for unused included hours. Package cost = fixed fee + max(0, hours used − included hours) × overage rate. Straight hourly cost = hours used × hourly rate.

The fixed fee applies even with no hours used. Fixed and overage amounts round separately, then sum. Effective package cost per used hour is undefined at zero hours. Unused allowance is a percentage of included hours and is undefined when no hours are included.

Retainer contracts vary. This is not a refundable deposit against hourly invoices, a legal trust-account model or a revenue-recognition calculation. Confirm scope, rollover, minimum invoices, refunds and service differences in the actual contract; no global break-even or cheapest-contract guarantee is inferred.

Worked example

A 3,000 package with 20 included hours and 150 overage costs 3,750 at 25 used hours. Straight hourly billing at 175 costs 4,375, so the package is 625 lower at that workload. At 40 hours, the package is 6,000 and hourly billing is 7,000.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

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