Methodology
How the calculation works
Monthly labor estimate = reserved monthly hours × billable hourly rate
Contingency = monthly labor estimate × contingency % ÷ 100
Suggested monthly retainer = monthly labor estimate + contingency + monthly expenses
What each input means
- Reserved hours per month (hours)
- Include planning, communication, development and testing time.
- Billable hourly rate (USD / hour)
- The rate you propose charging your client, not your internal labor cost.
- Contingency (%)
- A buffer applied to labor only. Enter 15 for 15%, not 0.15.
- Monthly retainer-specific expenses (USD)
- Out-of-pocket costs for this project; enter 0 when none apply.
A worked example
Reserve 12 hours per month at USD 75/hour for website maintenance. Labor is USD 900; a 10% buffer adds USD 90. With USD 30 in monthly expenses, the retainer is USD 1,020.00/month.
How to use the result
Reserved capacity is valuable because you keep it available. Make the allowance explicit and agree how requests are prioritized. A monthly retainer should not silently become an unlimited work or on-call arrangement.
Assumptions & edge cases
- The buffer applies to labor only.
- Define rollover, extra-hour pricing, response windows and exclusions separately.
- No annual discount, tax, payment fees or automatic availability premium is included.
All monetary values are in USD. No currency conversion is performed. Inputs must be non-negative, finite numbers of at most 1,000,000,000; intermediate values are not rounded, and displayed amounts use two decimal places. Very small nonzero values below 0.000001 are not supported.