How this number is made
A retainer buys a block of hours at the hourly rate, until you compare it with the hours the work took. Hours inside the block are covered. Hours past it are overage at the same rate, which is the usual agreement and not the only one. A retainer that is a fee for availability, with no hour count, is a different contract. This page assumes hours.
- The rate is the one the overage clause uses.
- If unused hours expire, the client’s cost per used hour rises. The rows show that.
Formula
Hours covered = retainer ÷ rate. Overage = the hours past that, times the rate.
Worked example
With the figures already in the form, hours the retainer covers is 20.0.
Questions
What if unused hours roll over?
Then this month’s unused hours are next month’s problem. The page is one period.
Is the retainer earned when it is paid?
That is an accounting and a contract question. This page prices the hours.