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Calculate a retainer price from delivery hours, overhead allocation and your chosen gross-margin target.
Define what the retainer includes
State delivery hours, revision limits, response expectations and outside charges. Use a total cost rather than the desired billing rate, or the cost base will already contain profit.
How the calculation works
Cost = delivery hours × total hourly cost + allocated overhead + outside costs. Price = cost ÷ (1 − target margin fraction), provided margin is below 100%. money left after variable costs = price − cost. Margin uses selling price as its denominator; it is not cost markup.
A worked example
Thirty hours at 50 plus 300 overhead and 200 outside costs gives 2,000 monthly cost. A 35% target margin needs 2,000 ÷ 0.65 = 3,076.92 price. money left after variable costs is 1,076.92.
Compare margin with capacity
A price that meets a margin target still needs demand and deliverable scope. Test extra revision hours before quoting. If several retainers percentage the same overhead, allocate it once rather than charging the full overhead to each cost model.
What the result leaves out
This does not establish a market-clearing price or draft a contract. Scope changes, taxes, collections risk and unused capacity are excluded. A 100% margin is not calculable for positive cost and is marked not applicable.
Open the calculator with your own figures →
The defaults are constructed examples, not market benchmarks. Choose one currency for every monetary input; the currency selector formats values and does not convert exchange rates. Keep a copy of the records and assumptions behind your result so you can repeat the comparison after the next reporting period.
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