Count the full period before calculating a rate
| Measure | Calculation | Decision use |
|---|---|---|
| Net retainer | Gross retainer − direct costs | Amount supporting the work |
| Committed hours | Delivery + non-delivery hours | Full time denominator |
| Effective rate | Net retainer ÷ committed hours | Compare with alternatives |
| Target retainer | Target rate × hours + direct costs | User-defined pricing scenario |
| Annual net | Net retainer × periods/year | Recurring annual comparison |
Worked example: a monthly retainer with admin time
| Measure | Calculation | Result |
|---|---|---|
| Net per period | 6,000 − 600 | 5,400 |
| Committed time | 60 delivery + 10 non-delivery | 70 hours |
| Effective rate | 5,400 ÷ 70 | 77.14/hour |
| Target retainer | 80 × 70 + 600 | 6,200/period |
| Annual totals | 12 periods | 72,000 gross; 64,800 net; 840 hours |
Reconcile scope, time and costs
- Define the services and period covered by the retainer.
- Record delivery and non-delivery time consistently.
- Include recurring direct costs once.
- Compare payment and scope terms separately.
- Do not label the user target rate as a market benchmark.
How the Retainer Rate Equivalent calculation works
effectiveHourlyRate = (retainerPerPeriod − directCostsPerPeriod) ÷ (deliveryHoursPerPeriod + nonDeliveryHoursPerPeriod)
- effectiveHourlyRate
- Effective hourly rate
- retainerPerPeriod
- Retainer per period
- periodsPerYear
- Periods per year
- deliveryHoursPerPeriod
- Delivery hours
- nonDeliveryHoursPerPeriod
- Non-delivery hours
- directCostsPerPeriod
- Direct costs
- targetHourlyRate
- Target hourly rate
The calculator and article use this relationship consistently; the article does not reimplement the calculation.
minimumRetainerPerPeriod = targetHourlyRate × committedHoursPerPeriod + directCostsPerPeriod
- minimumRetainerPerPeriod
- Retainer needed for target rate
- retainerPerPeriod
- Retainer per period
- periodsPerYear
- Periods per year
- deliveryHoursPerPeriod
- Delivery hours
- nonDeliveryHoursPerPeriod
- Non-delivery hours
- directCostsPerPeriod
- Direct costs
- targetHourlyRate
- Target hourly rate
The calculator and article use this relationship consistently; the article does not reimplement the calculation.
annualNet = netRetainerPerPeriod × periodsPerYear
- annualNet
- Annual net retainer value
- retainerPerPeriod
- Retainer per period
- periodsPerYear
- Periods per year
- deliveryHoursPerPeriod
- Delivery hours
- nonDeliveryHoursPerPeriod
- Non-delivery hours
- directCostsPerPeriod
- Direct costs
- targetHourlyRate
- Target hourly rate
The calculator and article use this relationship consistently; the article does not reimplement the calculation.
6,000 per month for 70 committed hours and 600 direct costs at an 80 target rate.
Inputs used in the Retainer Rate Equivalent worked example
| Input | Entered value | What it represents | Source class |
|---|---|---|---|
| Retainer per period | 6,000 currency units/period | Gross retainer for one repeated period. | user assumption |
| Periods per year | 12 periods/year | Number of retainer periods in a year. | user assumption |
| Delivery hours | 60 hours/period | Delivery time committed per period. | user assumption |
| Non-delivery hours | 10 hours/period | Administration, sales and other time per period. | user assumption |
| Direct costs | 600 currency units/period | Direct retainer costs per period. | user assumption |
| Target hourly rate | 80 currency units/hour | Target effective rate used to derive a minimum retainer. | user assumption |
Worked example: Retainer Rate Equivalent
The calculator normalizes the inputs above, applies Effective hourly rate, and returns the outputs below. The displayed result is therefore reproducible in the linked calculator.
| Measure | Result | Interpretation |
|---|---|---|
| Effective hourly rate | 77.14 currency units/hour | Net retainer divided by delivery and non-delivery hours. |
| Retainer needed for target rate | 6,200 currency units/period | Target rate times committed hours plus direct costs. |
| Annual net retainer value | 64,800 currency units/year | Net retainer per period multiplied by periods per year. |
Interpret the result and test Delivery hours
- Effective hourly rate: 77.14 currency units/hour. Net retainer divided by delivery and non-delivery hours.
- Retainer needed for target rate: 6,200 currency units/period. Target rate times committed hours plus direct costs.
- Annual net retainer value: 64,800 currency units/year. Net retainer per period multiplied by periods per year.
| Result | Baseline | Changed-input scenario | How to read it |
|---|---|---|---|
| Effective hourly rate | 77.14 currency units/hour | 71.05 currency units/hour | Net retainer divided by delivery and non-delivery hours. |
| Retainer needed for target rate | 6,200 currency units/period | 6,680 currency units/period | Target rate times committed hours plus direct costs. |
| Annual net retainer value | 64,800 currency units/year | 64,800 currency units/year | Net retainer per period multiplied by periods per year. |
Checks that are specific to Retainer Rate Equivalent
- The worked example is calculated through the same shared-work-logic engine as the planner.
- Non-finite and out-of-range assumptions return an input error.
- Result cards, trace, CSV, PDF and methodology bind to named engine result fields.
What this Retainer Rate Equivalent guide includes and excludes
- All delivery and non-delivery hours are entered.
- Direct costs recur every selected period.
Sources and method boundary
- ilostat.ilo.org context for the market-neutral method boundary — ilostat.ilo.org (accessed 2026-07-28): Context for the market-neutral time and earnings boundary; the calculator and methodology define the canonical calculation method.
- www.ilo.org context for the market-neutral method boundary — www.ilo.org (accessed 2026-07-28): Context for the market-neutral time and earnings boundary; the calculator and methodology define the canonical calculation method.
- Retainer Rate Equivalent methodology — Wage101 (accessed 2026-07-28): Canonical formulas, units, validation, calculator behavior and limitations.