How to Build Freelance Retainer Clients (Stable Income)

A retainer is an agreement in which a client pays you a fixed amount on a regular schedule, such as monthly, for a set amount of your time or a set list of work. To build retainer clients, offer a retainer to clients who already have repeat work for you, write down exactly what the fee covers, set an overage rate for work beyond it, bill on a recurring schedule, and send a short report each month so the client can see what they're paying for.

Types of Retainer

• Hours retainer: the client buys a set number of hours a month, such as 20 hours of design support.
• Deliverables retainer: the client buys a set list of work, such as four blog posts and a monthly newsletter.
• Access retainer: the client pays to have you available within an agreed response time, plus small tasks.

Pick one model per client so both of you know what the fee pays for.

Who to Offer a Retainer To

Retainers suit clients whose needs repeat month after month. A good time to suggest one is right after you've delivered a project well and the client asks for more of the same work. For example: "Next quarter could run as a monthly retainer. Here's what it would include."

If the client's work comes in large, irregular bursts, a project fee with a small support retainer can fit better than a fixed monthly bucket.

What to Put in the Retainer Agreement

This is general information, not legal advice. Ask a lawyer to review your agreement. Write down:

• What's included: the hours or deliverables per month, the channels or tasks covered, meetings, and the monthly report.
• What's excluded: for example, new product launches, rush weekend work or extra stakeholders, unless you agree on them separately.
• Unused hours: whether they roll over to the next month or expire.
• Overage rate: what you charge for work beyond the included hours.
• Response time: what counts as an urgent request and how quickly you reply.
• Billing: the amount, the billing date, when payment is due and how the client pays.
• Notice: how either side can change or end the retainer.

For more on contract terms, see freelance contract essentials, and for keeping requests inside the agreement, see how to handle scope creep.

Pricing a Retainer

Start from the hours you expect to spend each month, including meetings, reporting and back-and-forth, and multiply by your rate. Then set an overage rate for hours beyond the bucket. If the overage rate is higher than the retainer's hourly equivalent, the client has a reason to size the retainer correctly. For setting your base rate, see how to set freelance rates and how to negotiate freelance rates.

Sample Retainer Calculation

These are sample figures for a fictional design retainer: 20 hours a month at $90.00 an hour, with unused hours expiring at month end and an overage rate of $110.00 an hour.

• Monthly retainer fee: 20 hours × $90.00 = $1,800.00
• Month 1, 18 hours used: the client pays the $1,800.00 fee. The 2 unused hours expire. Your effective rate is $1,800.00 ÷ 18 = $100.00 an hour.
• Month 2, 24 hours used: 4 hours over, so the overage is 4 × $110.00 = $440.00 and the month's total is $1,800.00 + $440.00 = $2,240.00. Your effective rate is $2,240.00 ÷ 24 = $93.33 an hour.
• Month 3, 20 hours used: $1,800.00.
• Quarter total: $1,800.00 + $2,240.00 + $1,800.00 = $5,840.00.

If the client keeps going over, as in month 2, that's a sign to propose a larger bucket at the next review rather than billing overage every month.

Report Every Month

Send a short report with each invoice or at month end:

• What you delivered
• Hours used against hours included
• What's planned for next month
• Anything blocking progress

A report lets the client see the work behind a fixed fee and gives you the figures for the next review.

Review and Renew

Review the retainer before it renews, using the monthly reports. If the client used fewer hours than included, offer a smaller bucket or shift the hours to more useful work. If they went over, propose a larger bucket or confirm the overage terms. Ask your accountant how retainer payments you receive in advance should be treated for tax.

Billing Retainers in Billed

Billed's recurring invoices page has a section headed "Improve Your Cash Flow With Retainers", which says: "Establish a stable cash flow with retainers. Negotiating fixed prices and sending recurring invoices makes it easier for you to forecast your income and upcoming workload."

The same page says:

• "Invoices are created automatically and sent to your customers according to your settings."
• You can "Choose whether to send invoices daily, weekly, monthly or yearly", and choose the number of invoices to send "or send invoices indefinitely."
• You can "Auto send invoices or save them as draft to recheck and send later."
• Its FAQ says "you can charge your clients and collect payments automatically by integrating Billed with Stripe."

For overage hours, Billed's time tracking page says you can "Log the time you and your team spend on tasks and projects" and "invoice hourly projects from the time you tracked." For a ready-made layout, see the retainer invoice template.

Related Guides

• Guide to retainer invoicing
• Freelance contract essentials
• How to handle scope creep
• How to set freelance rates
• How to negotiate freelance rates
• How to find freelance clients
• How to create a freelance portfolio

FAQ

How do freelance retainer agreements work?

The client pays a fixed amount on a regular schedule, such as monthly, for a set number of hours, a set list of deliverables, or your availability within an agreed response time. The agreement says what's included, what's excluded, what happens to unused hours and what you charge for extra work.

How much should I charge for a freelance retainer?

Multiply the hours you expect to spend each month, including meetings and reporting, by your rate, and set a separate overage rate for extra hours. In the sample on this page, 20 hours at $90.00 gives a monthly fee of $1,800.00, with overage at $110.00 an hour.

What happens to unused retainer hours?

Whatever your agreement says. Some retainers let unused hours roll over to the next month, and others let them expire. Choose one, write it into the agreement, and review the bucket size if hours keep going unused.

Can I bill a retainer automatically in Billed?

Billed's recurring invoices page says "Invoices are created automatically and sent to your customers according to your settings," with daily, weekly, monthly or yearly billing. Its FAQ says you can charge clients automatically by integrating Billed with Stripe.