Set a defensible monthly retainer by accounting for delivery hours, account-management time, operating overhead, and desired profit. Unlike a simple hours-times-rate quote, this calculator includes the unpaid work required to service the account and treats profit as a margin on the final price. It provides a monthly retainer, effective client-facing hourly rate, and annual contract value.
The result is the recurring monthly price needed to meet every entered cost and margin assumption.
Profit margin is calculated as profit divided by price, not as a markup on cost.
For 40 delivery hours, 8 admin hours, $75 hourly compensation, $300 overhead, and a 20% margin, the cost base is $3,900 and the required retainer is $4,875 per month.
Meetings, reporting, and account management consume capacity even when they are not direct deliverables.
Estimate the capacity you realistically reserve and revisit the retainer if actual demand consistently exceeds it.
No. A 20% margin requires dividing cost by 0.80; adding 20% to cost produces a lower margin.
Include the portion of software and other expenses attributable to servicing this account.
It also recovers admin time, overhead, and profit through the hours the client receives as delivery capacity.
| Input | Meaning | Unit |
|---|---|---|
| Monthly delivery hours | User-entered planning assumption | hours |
| Monthly admin and meeting hours | User-entered planning assumption | hours |
| Target compensation per work hour | User-entered planning assumption | USD |
| Monthly account overhead | User-entered planning assumption | USD |
| Desired profit margin | User-entered planning assumption | % |