Retainer vs Hourly Breakeven Calculator
Compare a flat monthly retainer to hourly billing and find the number of hours where the two break even.
How it works
Breakeven hours = retainer ÷ hourly rate · Effective rate = retainer ÷ hours worked
A retainer trades a predictable flat fee for the risk of how much work a month actually demands. Divide the retainer by your hourly rate to find the breakeven point — the hours at which the flat fee equals what you would have billed hourly. Below it the retainer beats hourly; above it you are working for less than your rate. The effective rate makes the trade concrete: it is what the retainer really pays per hour once the work is done.
Worked example
A $3,000 retainer at a $120 hourly rate breaks even at 25 hours. If a month runs to 22 hours, the retainer earns 3,000 ÷ 22 ≈ $136/hour — better than hourly; at 30 hours it would fall to $100/hour, below the rate.
Frequently asked questions
When does a retainer beat hourly billing?
When your actual hours stay below the breakeven point (retainer ÷ hourly rate). Below it the flat fee pays more per hour than billing time; above it you are effectively discounting. Retainers also add predictable income, which has value on its own.
How should I set retainer hours?
Cap the included hours near the breakeven point and bill overflow at your hourly rate. That protects you from busy months while keeping the flat fee attractive in quiet ones.
Are retainers worth a lower effective rate?
Sometimes. Guaranteed monthly income, smoother cash flow and a locked-in client can justify a modest discount to your hourly rate — just make sure you know how big that discount is.
Related calculators
Educational estimate, not financial advice.