A retainer is built from the bottom up: the real hours a client consumes in a month, multiplied by what one loaded billable hour costs you, plus the margin you decide on. That number is your floor, not your price. The model you pick, retainer, deliverable or hourly, only changes who carries the month that goes wrong.
An hourly cost is not a salary divided by hours
Most prices in this industry are set by looking at what somebody else charges, and that is where half the accounts that never cover their month come from. The right order is the reverse: first what an hour costs you, then the hours the client consumes, then the margin, and the market last, as a correction rather than a starting point.
A person does not cost their payslip. They cost their gross salary, the employer's social security that never appears on that payslip, the desk, the software, the accountant and the rent, all divided by the hours that are genuinely billed. That last word is what breaks most people's arithmetic, because nobody bills a full working day. Between internal meetings, proposals that go nowhere, admin and training, a billable utilisation of 60 or 70 per cent is already good, and anyone dividing a salary by 1,800 annual hours has set a rate below their own cost without noticing.
The gap between those two divisions is not a rounding difference, it is what decides whether you have a business. Out of 52 weeks, holidays and bank holidays leave about 46 worked, and only a fraction of those gets charged to anybody. That fraction moves the final answer more than the salary does, more than the margin does, and far more than what the agency down the road charges.
The hours a client really consumes
The second calculation is an inventory, not an estimate. Write down this client's month as it is actually happening now rather than as it was signed a year ago: how many networks, how many feed pieces per network, how many stories, how many reels, how many hours of answering messages, comments and reviews, how many of pulling the data and writing what it means, and how many of calls, emails and Thursday afternoon voice notes.
The three lines that always get left out are the same in every agency. Adaptation per network, because one idea published in five places is five small jobs and not one. Community management, which appears in no proposal and eats an enormous share of the month on an active account. And revisions, the ones you end up doing rather than the ones the contract allows.
Turning that into hours needs minutes per piece, and those minutes are yours: time three real pieces before trusting a round number. If you want the whole calculation without building a spreadsheet, the social media rate calculator asks for exactly these inputs and returns the hours, the cost of serving that client, and the retainer your margin produces on top.
The three models, and who carries the risk
The same month of work can be charged in three ways, and all three charge for the same work. What changes is who pays when the month drifts from the plan.
| Model | What the client buys | Who absorbs the drift |
|---|---|---|
| Monthly retainer | A continuous result and an identical invoice every month | You: if they ask for double, you bill the same |
| Per deliverable | A number of pieces, each with a unit price | Shared: every extra piece is paid for |
| Hourly | Time, justified on a timesheet | The client: every overrun is billed |
The retainer is what keeps an agency alive, because it makes cash predictable on both sides, and it is the only one of the three that pays for the work nobody sees. Its trap is scope: a retainer with no written number of pieces and no written number of revisions is an open door for the month to grow while the invoice does not.
Per deliverable pricing is understood without explanation, which is why it sells well, but it has a known hole: management is not a deliverable. Answering messages, coordinating, reviewing and reporting are not pieces, so either they sit on a separate base line or you are giving them away every month. A rate card with no management base is almost always a discounted retainer in disguise.
Hourly is the fairest and the hardest to sell, because it punishes you for being fast and turns every conversation into an argument about a timesheet. It works well for consulting, audits and jobs with a clear end, and badly for continuous management.
A worked month, with the arithmetic shown
The numbers below are invented and their only job is to show the order of the operations. Put yours on top and something else comes out.
One person at 35 hours a week, 46 weeks a year and 65 per cent billable utilisation bills around 1,047 hours a year. If their loaded annual cost, gross plus employer social security plus desk and tools, is 52,000 euros, a billable hour comes out at about 50 euros. That is the cost and not the rate: below it you lose money and you will not see it until year end.
Say that client consumes 18 hours a month across production, community, reporting and calls. Serving them costs 900 euros. With a 40 per cent margin on the fee, the retainer is the cost divided by 0.6, which is 1,500 a month. Look closely at that division: the margin goes on the fee and not on the cost, and adding 40 per cent to 900 gives 1,260, which is a real margin of 29 per cent rather than 40. That single mistake costs a quarter of the profit.
The figure is net of VAT, the value added tax charged in Spain, and an invoice to a Spanish company may also carry an IRPF withholding, an advance on income tax deducted from the total, so less than that lands in the bank. Check it with your accountant before projecting cash from the number above.
Everything in this article happens in one place in GoFeed.
Try it freePerformance pricing, and why it rarely works
Charging a percentage of sales sounds like perfectly aligned incentives and it is the conversation that has sunk the most agencies. The problem is not the model, it is that on social an agency controls a small share of the outcome. The product, the price, the stock, the website, the service and the competition are all the client's, and a bad month caused by a stockout is one you swallow whole.
If you still want to go there, two conditions are not negotiable. The first is a fixed base that covers your cost of serving, because without it you are financing somebody else's business out of your own payroll. The second is a metric you can audit yourself, measured with your own attribution rules rather than with the screenshot they send you on the third of the month.
And a third, less obvious one: an end date. A commission with no review date becomes unfair to somebody in one direction or the other, and it usually breaks precisely when it starts to work.
What makes a price hold
A correct price and a miscounted diary end up in the same place. Your retainer is only profitable if the person running the account has room for it, and capacity is measured in hours rather than in logos: how many billable hours that person has in a month, and how many an average client takes. On the worked example above, an 18 hour client occupies roughly a fifth of one full time person. How to run that calculation for your own team is in the capacity per person guide, and the clients per person calculator solves it with your figures.
Then there is the annual review, which is maintenance rather than an increase. Costs move on their own and a price frozen for three years is a quiet cut. What prevents the shock is having written it into the proposal from the start and bringing the quarter's data to the conversation.
Tools belong inside the hourly cost, not as a surprise that shows up in December. Our own model is per workspace rather than per seat, with no lock in and no charge per post, which means adding somebody to the team does not move the invoice; the current figures live on the pricing page, which reads the live catalogue. For a one off piece, like a video commissioned outside the retainer, the arithmetic is different and it is in how much to charge for a reel.