From cost per hour to a monthly retainer
Most retainers get priced by looking at what somebody else charges. This one works the other way round: describe the month of work one client generates, set what an hour of your team really costs you, and come out with a figure that survives a negotiation. Then see the same month quoted three ways.
This client's month
What gets produced and what gets attended to, as it happens now rather than as it was signed a year ago.
Each network adds its own adaptation, even when the idea is the same.
Posts and carousels. Reels are counted separately because they cost something else.
Answering messages, comments and reviews. It is the line that gets underestimated most.
Pulling the numbers, reading them and writing what they mean.
The monthly call, the emails and the voice notes on a Thursday afternoon.
How long each thing takes
These minutes are yours, not the industry average: time three real pieces before you trust a round number. Scripting, production, review and publishing all go in here.
What an hour of your team costs
A person does not cost their salary: they cost their gross pay, the social security you pay on top, the holidays, the public holidays and the tools, spread over the hours that actually get billed. Dividing a wage by a full working week is exactly how a rate that does not cover the month gets set.
The year minus holidays and public holidays. Nobody works all fifty two.
The field that decides everything else. Internal meetings, proposals, admin and training are paid for by no client.
The salary before tax, not what lands in the bank.
On the gross pay: the share the company pays, which never shows on a payslip.
Software, hardware, office and accounting, split per person.
The margin
Margin is not the owner's profit: it pays for the quiet months, the client who leaves, the work redone for free and whatever you want to reinvest. It goes on the fee, not on the cost.
A healthy services margin sits well above the one most people give themselves.
What comes out
Hours per month
40,2 h
Everything above turned into time, production and attention included.
Loaded cost per hour
30 €/h
What one billable hour costs you before you earn anything.
Cost of serving this client
1205 €
The month's hours at their cost. Below this figure you are losing money.
Monthly retainer
2008,33 €
Net of IVA, the Spanish value added tax, and before any discount. It is your floor, not the market price.
Share of one person
43,7%
How much of one full time person's billable capacity this account takes.
The same month, in three models
All three charge for the same work and move the risk to different places. Choosing a model is choosing whose problem a month that goes wrong is.
Monthly retainer
2008,33 €
The risk is yours: the month a client asks for twice as much, you invoice the same. In exchange your cash flow is predictable and so is theirs, and it is the only model that pays for the work nobody sees.
Price per deliverable
The risk is shared: every extra piece gets paid for. The trap is that management is not a piece, so it either goes in as its own line or you give it away.
- Feed piece
- 37,50 €
- Story
- 6,67 €
- Reel
- 125 €
- Management base per month
- 475 €
Price per hour
50 €/h
The risk is the client's: they pay for however long it takes. Which is why they will ask you to justify every hour, and why getting better at the work lowers your own invoice.
- The market. The same month of work is paid differently in a capital and in a small town, and by a startup and by a chain of clinics. This works out your floor, not what the client is willing to pay.
- IVA, the Spanish value added tax. Every figure here is net, the way quotes are signed. The tax goes on at the end and depends on your regime and on your client.
- Winning the work. Selling the account, writing the proposal and getting it started appear nowhere in the hours of the month, and they eat most of the margin in the first quarter.
- Getting paid. A client who pays late costs more than one who pays on time, even when the retainer is identical.
Frequently asked questions
How do you work out a loaded cost per hour?
Add the gross annual pay, the social security the employer pays and what the desk and the tools cost, then divide by the billable hours in the year, not by the hours worked. Dividing by a full working week is what produces rates that do not cover the month.
What share of hours is realistically billable?
In most small agencies it lands between half and two thirds of the working week. The rest goes to internal meetings, proposals, admin and training, and no client pays for any of it. Measure it for a month before you fix it: it is almost always worse than it looks.
Retainer, per deliverable or per hour?
A retainer makes your cash flow predictable and leaves you carrying the bad month. Per deliverable shares that risk and leaves management out, so it has to be charged as its own line. Per hour hands the risk to the client, who will then ask you to account for every minute, and it penalises you every time you get faster.
How often should a retainer be reviewed?
Once a year, and whenever the scope changes. What tends to drift is not the price but the scope: pieces added without signing anything, a new network, a second person to report to. Run the month through this calculator again before you renew.
Fourteen days to decide
Connect one account, schedule a week and see whether it fits. If it does not fit, cancel before day 15 and nothing is charged.
Keep reading
- Guides
How to price social media management: three models and their numbers
The three usual models leave very different margins, and the one you pick decides how many clients you can carry.
- Guides
How much to charge for a reel: working out your rate
Your rate comes from timing three real pieces and writing down what is included, not from what the account you admire charges.