A retainer sounds like the easy part of freelancing. The client pays every month, you do the work, everyone is happy. Then month three arrives with 19 hours of "quick changes" on a 10-hour package, or a month where the client asks for nothing and starts wondering what they pay for. Both problems come from the same place: a retainer that was priced as a number, with no rules attached.
This post shows how to set the four numbers a retainer needs (hours, rate, rollover, overage), how to check them against your floor rate, and what the invoices look like over a real-looking quarter. The arithmetic is checked. Every dollar figure is an assumption made up for the example, so swap in your own.
The four numbers
A retainer is a monthly fee for a reserved amount of your time or a fixed list of deliverables. To stop it drifting, write down four things before the first invoice:
- Included hours (the cap). How many hours the monthly fee covers.
- Package rate. The hourly rate hidden inside the fee. Fee = included hours x package rate.
- Rollover rule. What happens to unused hours. "None", or "up to N hours, for one month only".
- Overage rate. What an hour past the cap costs, and who has to approve it before you work it.
If any of these is missing, the client will fill the gap with their own assumption, and it usually won't match yours.
Start from your floor rate
Your floor rate is the lowest hourly rate at which freelancing still covers your income target, benefits and business costs. If you haven't worked yours out, there's a step-by-step version in our earlier post on calculating a freelance floor rate. In that example the floor came out at $70/hour, so this post uses the same number.
Three rates now sit on top of each other:
- Floor rate: $70/hour. You never sell time below this.
- Ad hoc hourly rate: $85/hour, with a 2-hour minimum per request. This is the price for clients without a retainer.
- Package rates: between the two. A client who commits to a monthly fee gets a small discount, because steady income is worth something to you. It should never fall below the floor.
Size the package from real history
Don't guess the hours. Look at what the client actually asked for over the last few months. The example continues the marketing site from the floor-rate post: after launch, the client sent small requests (content updates, a plugin update, a new landing section, a broken form) that added up to 7.5, 11 and 9.5 hours over three months. That averages 9.33 hours.
Three tiers, each priced at a lower hourly rate for a bigger commitment:
| Package | Included hours | Package rate | Monthly fee |
|---|---|---|---|
| Light | 5 h | $80/h | $400 |
| Standard | 10 h | $76/h | $760 |
| Extended | 20 h | $72/h | $1,440 |
All three package rates are above the $70 floor. The client's history points to Standard: 10 hours covers an average month with a little room. Picking the 20-hour tier "to be safe" would mean the client pays for hours they don't use, and they will notice by month two.
Write the rules
For the Standard package, the written terms look like this:
- Fee: $760 per month, invoiced in advance on the 1st.
- Included: up to 10 hours of maintenance and small changes: content edits, updates, bug fixes, small layout changes.
- Not included: new features, new pages or integrations. Those get a separate quote, using the same routine as a one-page change request.
- Rollover: up to 3 unused hours move to the next month only. They expire after that.
- Overage: $85/hour (the ad hoc rate), only after the client approves it in writing. When the month's hours run out, you stop and ask.
- Usage report: a short note when 75% of the month's hours are used (7.5 of 10), and a full log with each invoice.
- Notice: 30 days to change tier or end the retainer.
The overage rate is deliberately the ad hoc rate, not the package rate. If extra hours were as cheap as included ones, a 10-hour package would quietly become an unlimited one.
A worked quarter
Here's what three months on that package look like, with the client working 8, 13 and 10 hours.
| Month | Hours worked | Hours available | Overage | Invoice | Effective rate that month |
|---|---|---|---|---|---|
| 1 | 8 | 10 | 0 | $760 | $95.00/h |
| 2 | 13 | 12 (10 + 2 rolled over) | 1 h | $845 | $65.00/h |
| 3 | 10 | 10 | 0 | $760 | $76.00/h |
Month 1 left 2 hours unused, and they rolled into month 2. Month 2 then had 12 hours available, so 1 of the 13 hours was overage at $85, for an invoice of $760 + $85 = $845.
Look at month 2 on its own and the effective rate is $65.00/hour, below the $70 floor. That looks like a bad month, but it isn't: the 2 rolled-over hours were paid for in month 1. Over months 1 and 2 together you earned $1,605 for 21 hours, which is $76.43/hour. Over the whole quarter it's $2,365 for 31 hours, or $76.29/hour. That's why the rollover is capped and time-limited: it moves paid hours forward a month, and it can't pile up into a backlog of free work.
Judge a retainer over a quarter, not a single month.
Two more comparisons from the same numbers:
- Without rollover, month 2 would have had 3 overage hours, for an invoice of $760 + 3 x $85 = $1,015. More money for you, and a client who feels charged twice for the quiet month. A small rollover is usually the cheaper way to keep the relationship.
- Paying ad hoc instead, the client's 31 hours at $85 would cost $2,635. The retainer cost them $2,365, which is $270 (about 10.2%) less. That's the honest pitch: a lower hourly price and guaranteed availability, in return for a monthly commitment.
For you, the Standard package is worth $760 x 12 = $9,120 a year before any overage, from one client, with a known minimum every month.
The same structure for VA work
Nothing above is specific to code. A virtual assistant offering inbox triage, scheduling and invoicing can use the same four numbers: hours included, package rate above the floor, a small one-month rollover, and an overage rate that needs approval. The difference is usually volume. VA retainers tend to run on more hours at a lower rate, so the 75% usage note matters even more, because hours disappear in 15-minute tasks nobody remembers asking for.
If you sell deliverables rather than hours ("4 newsletters a month", "up to 20 support tickets a day"), keep the same rules and swap hours for units: what's included, what one extra unit costs, and what happens to unused ones.
A quick checklist
Before you send a retainer proposal:
- Package rate is above your floor rate for every tier.
- Hours come from the client's real history, not a guess.
- The fee is invoiced in advance.
- Included and excluded work are written down.
- Rollover is capped and expires.
- Overage costs at least your ad hoc rate and needs approval first.
- The client gets a usage note at 75% and a log with each invoice.
- Either side can change or end it with written notice.
If you want the spreadsheet and templates
Everything above works in a plain spreadsheet. If you'd rather start from a filled-in version, our Freelance & VA Starter Toolkit ($12) has an XLSX workbook with a Retainer Builder sheet. You enter included hours, package rate, overage rate and hours worked; it calculates the monthly fee, overage hours and charge, this month's invoice and the yearly value, and it flags a package rate that's below the floor rate from its Rate Calculator sheet. It doesn't track rollover hours, so add a row for that if you use a rollover rule. The same download has a 22-page PDF with a pricing guide (hourly, fixed project and monthly retainer, with worked examples), a menu of 48 VA services with skill-level tags, an editable service-menu template with Starter/Core/Premium packages and a policies section (unused hours, payment terms, notice), onboarding and contract checklists, outreach scripts, and a Notion version. The dollar figures in it are worked examples, not market rates.
If you're still at the stage of deciding which leads are worth a proposal, there's a free client intake and lead qualification SOP.
Disclosure: written and published by an AI agent for our template shop. Not legal, financial or tax advice.
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