Hours times rate, minus a discount
A retainer begins as the full value of the reserved hours: 40 hours a month at $150 is $6,000. The retainer discount is then taken off that figure rather than added to it, so a 15% discount produces a $5,100 monthly retainer, and the discount amount is printed on its own line so the cost of the commitment is never hidden inside the total.
The discount is what the client gets for committing to the block in advance. That commitment has value on your side too - a guaranteed block can be scheduled and staffed, where hourly work cannot - which is why the page treats the discount as a trade with a price rather than as a courtesy.
The effective rate is the honest test
Divide the discounted retainer by the hours and you get the effective hourly rate, which at the defaults is $127.50. That is the number to hold against your floor, not the $150 you charge for on-demand work, because the discount is real money and it is given before a single hour is worked.
The effective rate is the guardrail on the whole arrangement. A retainer that lands below the rate you would accept for ordinary hourly work is a discount you did not intend to give, and it ties up the hours at the same time. Reading it next to the discount percentage is what stops a reasonable-looking percentage from becoming an unreasonable monthly fee.
Retainers anchor your base income
Retainers supply the predictable part of a freelance or agency month, and retained clients tend to add one-off project work on top, so the monthly baseline is rarely the whole relationship. That is why a retainer can be priced lower per hour than project work without being a loss.
The trade-off is capacity: an hour promised to a retainer cannot be sold to anyone else, so the effective rate has to clear the work you would otherwise take. The page shows the hours, the discount and the effective rate together for exactly that comparison.
Retainers versus the monthly target
The page measures against a built-in $10,000 monthly example goal, so the count it prints is how many retainers of exactly the size on screen it would take to reach that figure. It is a fixed reference point, not advice about what anyone should earn, and it knows nothing about your expenses.
Changing the hours, the rate or the discount moves the retainer and the count together, which is the useful part: a larger retainer usually beats another client, because every client arrives with its own scope, meetings and scheduling. A small retainer therefore reads as many clients, and a large one as very few.
The capacity a retainer really consumes
Forty hours a month is a quarter of a 160-hour working month, not a small block. Three retainers that size fill 75% of the calendar before a single project arrives, and the fourth one is the month - which is why retainers belong in a capacity plan before they belong in a revenue plan.
The discount is paid in hours, not in goodwill. At $150 an hour a 15% cut is $22.50, so a 40-hour retainer gives away six hours of work every month: 72 hours a year, close to two working weeks. Moving from 15% to 10% buys 24 hours back a year at the same sticker rate.
Decide what happens to unused hours before the first invoice. They can expire (good for you, corrosive for trust), roll over one month with a cap, or convert into a project credit. Rolling over without a cap turns the guaranteed block into a savings account the client draws down in their busiest quarter - and their busiest quarter is usually yours.
Raising the floor beats deepening the discount. A 40-hour retainer at a $127.50 effective rate earns less than 25 hours at $150 with the other 15 sold elsewhere at full price; the retainer only wins where those hours would otherwise sit empty. When the calendar is full, a discount is a gift.
Watch the invoice, not the proposal: the discount is a percentage of the sticker rate, so if the sticker rate was already a compromise, the retainer compounds it. Re-run the figure at every renewal - a rate that was fine eighteen months ago is a discount today.
One last comparison worth doing before signing: the same hours sold as a project. Forty hours at the effective retainer rate against forty hours at the project rate, minus the proposal and admin time a project costs, is the honest test of whether the guaranteed block is being paid for or paid for twice.
Danfio