Retainer Sizing Tool

An agency retainer is priced by working backward from delivery cost. Multiply the monthly scope hours by your team's internal cost per hour, divide by (1 minus the sum of your overhead percentage and target profit percentage), and the result is the minimum monthly retainer that hits your margin target. The calculator above runs this math automatically and adds a 10% comfort margin to produce a recommended figure.

Healthy small-agency retainers target 15-25% net margin after delivery cost and overhead. Above 35% is strong but rare in competitive markets. Below 10% is thin and leaves no room for scope creep or unexpected client churn. Set the slider in this calculator to the margin you actually need to support owner draws, growth investment, and a slow-quarter reserve — not to what feels palatable to the client.

Yes. Productive.io 2024 Agency Benchmarks found 41% of small-agency retainers run unprofitable in months 6-12 due to scope creep that did not get re-quoted. A 20% buffer applied to scope hours when calculating the retainer absorbs the inevitable extra requests without forcing an awkward mid-year re-pricing conversation. The buffer toggle in the calculator above is on by default for this reason.

A time-based retainer gives the client a defined number of hours per month (e.g. 30 hours for $X). An outcome-based retainer gives the client defined deliverables regardless of hours required (e.g. monthly campaign, weekly report, quarterly strategy). Time-based is easier to scope and price. Outcome-based is easier to scale once you have repeatable systems but riskier early on because over-runs eat your margin entirely.

Annually at minimum. Frame it as an annual scope-and-rate review, not a price increase. Pick a renewal anniversary as the natural moment. Tell the client in writing 60-90 days ahead. The 73% of agencies who raise rates less often than every 18 months (AgencyAnalytics 2024) are the same agencies whose retainers drift unprofitable.