Core concepts
Retainer
A retainer is an upfront fee a client pays to reserve ongoing access to your services, either drawn down against work or as a recurring fixed fee.
What a retainer means
A retainer is money a client pays in advance to secure your ongoing availability. It signals commitment from both sides: the client reserves your time, and you agree to be ready to work for them. Retainers are common for consultants, agencies, lawyers, designers, and other service professionals with continuing relationships.
Retainers usually take one of two forms. In a draw-down retainer, the client prepays a balance and you bill your hours or deliverables against it until the balance runs low and is topped up. In a fixed recurring retainer, the client pays a set amount each period for an agreed scope of access or work, whether or not they use all of it.
Retainer versus deposit
A retainer and a deposit are not the same thing. A deposit is a one-time partial payment made before a specific project starts, applied toward that project total and often refundable until work begins. A retainer is about reserving ongoing access over time, frequently on a recurring basis, rather than prepaying for a single defined job.
Spell the arrangement out in writing so there is no confusion. State the amount, the period it covers, the scope it buys, how unused time is handled, and whether any portion is refundable. Clear terms protect the relationship and make every retainer invoice easy to reconcile.
Example: A consultant charges a 2,000 dollar monthly retainer for up to 10 hours of advisory work. The client pays 2,000 dollars on the 1st of each month and can book up to 10 hours that month. At 2,000 dollars for 10 hours, that is an effective rate of 200 dollars per hour, and the consultant keeps the slot reserved whether the client uses 4 hours or all 10.
FAQs
Frequently asked questions
Is a retainer the same as a deposit?
No. A deposit is a one-time partial payment toward a specific project before it starts. A retainer reserves ongoing access to your services, often as a recurring fee, rather than prepaying for one defined job.
Are retainers refundable?
It depends on the agreement. Draw-down retainers usually refund any unused balance, while fixed recurring retainers are often non-refundable for a period already reserved. Always state the refund policy in writing.
How do I invoice a recurring retainer?
Bill the agreed fixed amount on a regular schedule, such as the first of each month. A recurring invoice is well suited to this because it generates the same retainer charge automatically every period.
What is an effective hourly rate on a retainer?
Divide the retainer fee by the hours it covers. A 2,000 dollar retainer for up to 10 hours works out to 200 dollars per hour if the client uses the full allotment, and more per hour if they use less.
Related terms
Retainer fee
A retainer fee is an upfront payment a client makes to secure a provider’s availability or services, often drawn down against future work as it’s performed.
Recurring Invoice
A recurring invoice is an invoice that is automatically generated and sent on a set schedule for ongoing services.
Payment terms
Payment terms are the conditions on an invoice that state when payment is due and how it should be made, for example "Net 30" or "Due on receipt."
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