A retainer agreement is a contract for ongoing work: the client pays a fixed monthly fee, and the service provider sets aside time or delivers a defined set of recurring services every month. Agencies, consultants, bookkeepers, IT support firms and freelance designers use them to turn one-off projects into steady income. Below is a plain-English retainer agreement example you can download free, plus the decisions you need to make before you fill it in.
One clarification before anything else. This is a business services retainer, sometimes called a retainership contract. It isn’t a lawyer’s engagement letter. Attorneys’ fee agreements and client trust money fall under state bar rules, and a lawyer should use their bar’s forms.
Is a retainer the right contract, or would a project contract fit better?
A retainer fits when the work repeats every month and neither side can list every task in advance. Think of a freelance marketer who writes four blog posts a month, sends a newsletter and handles “can you just” requests, or an IT consultant who’s on call for a 12-person office.
If the work has a clear start, finish and deliverable, a project contract is simpler. Our freelance contract is built for single projects, and the consulting agreement suits advisory engagements. If you’ll sign lots of separate projects with the same client over years, a master service agreement with short statements of work might suit you better. And if you just need to price something before anyone commits, send a quote first.
What are the three decisions every retainer needs?
Most retainer arguments come from one of three gaps. Fill these before anything else.
What does the monthly fee actually buy?
There are two basic models, and the template gives you a box for each. An hours retainer buys a block of time, say 20 hours a month at a fixed fee. A deliverables retainer buys a defined set of outputs, like “8 social posts, 1 newsletter, 1 performance report.” Mixing the two without saying so is how you end up doing 35 hours of work for a 20-hour fee.
What happens to unused time?
Pick one: unused hours expire at month end, or they roll over for one month and then expire, or they roll over up to a cap. Expiring hours is common because the provider has turned down other work to keep that time free. Rollover is friendlier to the client. Either is fine if it’s written down.
What happens when the client needs more?
Set an overage rate for extra hours, and a rule for approval. The template says the provider must get the client’s written OK (an email is enough) before going over the included hours. No surprises on the invoice.
What else does this retainer agreement template cover?
Here’s a hypothetical. A bookkeeper, Priya, signs a client at $1,500 a month for 12 hours of bookkeeping and payroll support, billed on the 1st, with overage at $110 an hour and unused hours expiring. Her agreement also needs to say:
Response times. How quickly the provider replies to requests, and business hours. “Within one business day” is a reasonable promise for most small practices. Emergency response, if offered, should cost extra.
Billing and payment. The fee is billed in advance on a set day. Overages and pre-approved expenses are billed in arrears. There’s a blank for a late fee if you want one.
Term, renewal and cancellation. An initial term (say three months) and then month to month, with 30 days’ written notice to cancel. The template says what happens to prepaid fees when either side cancels.
Ownership. Under federal copyright law, copyright in a work starts with its author, which is usually the person who created it. So if the client should own what they pay for, the contract has to transfer it. The template assigns the finished work to the client once it’s paid for, while the provider keeps their own tools, templates and know-how.
Independent contractor status and taxes. The provider controls how the work gets done, uses their own equipment and pays their own taxes. The IRS says the first step when paying a contractor is to have them complete Form W-9, and the client may need to report payments on Form 1099-NEC if they reach the IRS reporting threshold. The IRS instructions for Forms 1099-MISC and 1099-NEC give the current threshold.
Confidentiality, liability cap and the usual boilerplate. Standard stuff, in plain English.
How do you fill in and sign a retainer agreement?
- Choose hours or deliverables, and write the scope as a short list of recurring tasks. Include a line for what’s out of scope.
- Set the fee, included hours, rollover rule and overage rate.
- Agree response times and the cancellation notice period.
- Attach any rate card or service menu you refer to.
- Both sign before the first month’s invoice goes out.
A retainer is an ordinary commercial contract, and signing it electronically is normal. Under the federal ESIGN Act, a contract can’t be denied legal effect just because it’s in electronic form; our article on whether electronic signatures are legally binding explains more.
Download it, fill in the blanks, and send it for e-signature with any tool you like. (We’re building SignWren for exactly this; join the waitlist if you’d like early access.)
This template and guide are general information, not legal advice. For a specific contract or dispute, talk to a lawyer licensed where you are.
Template from signwren.com. General information, not legal advice. Check your state's rules and adapt it before you use it. This template is for ongoing business services. It is not a lawyer's fee or engagement agreement.
MONTHLY RETAINER AGREEMENT
This Monthly Retainer Agreement ("Agreement") is made on [date] between:
Client: [Client's full legal name or business name], of [address] ("Client"), and
Service Provider: [Service Provider's full legal name or business name], of [address] ("Provider").
1. Services
Provider will provide the following ongoing services to Client each month (the "Services"):
- [recurring service 1, e.g. "bookkeeping in Client's accounting software, up to 150 transactions"]
- [recurring service 2]
- [recurring service 3]
These are not included and will be quoted separately: [e.g. "tax return preparation, website redesigns, anything requiring travel"].
2. What the monthly fee covers
Choose one:
☐ Hours retainer. The monthly fee covers up to [number] hours of Services each calendar month ("Included Hours"). Provider will track time in [increments, e.g. 15-minute] increments and include a time summary with each invoice.
☐ Deliverables retainer. The monthly fee covers these deliverables each calendar month: [list, e.g. "8 social posts, 1 email newsletter, 1 monthly report"]. Requests beyond this list are extra work under section 4.
3. Unused time or deliverables
Choose one:
☐ Unused Included Hours or deliverables expire at the end of each month and are not refunded or carried over.
☐ Unused Included Hours roll over to the next month only, then expire.
☐ Unused Included Hours roll over, up to a maximum balance of [number] hours. Any rolled-over hours expire when this Agreement ends.
4. Extra work
If Client asks for work beyond what the monthly fee covers, Provider will tell Client before starting and get Client's written approval (email is enough). Approved extra work is billed at [$ amount] per hour, or at a price agreed in writing for that task.
5. Fees and payment
Monthly fee: [$ amount] per month.
Provider will invoice the monthly fee on the [day] of each month, in advance for that month. Extra work and pre-approved expenses are invoiced at the end of the month in which they happen. Invoices are due within [number] days. Payment by [method].
If an invoice is more than [number] days overdue, Provider may pause the Services after giving [number] days' written notice, and may charge a late fee of [amount or percentage], if permitted by law.
6. Expenses
Client will reimburse reasonable out-of-pocket expenses that Client approves in writing before they are incurred, such as [e.g. software licences bought for Client, stock images, printing]. Provider will send receipts.
7. Availability and response times
Provider will be available [days and hours, time zone]. Provider will reply to Client's requests within [e.g. one business day] and will aim to complete routine requests within [e.g. three business days]. Urgent requests outside these hours: ☐ not offered ☐ available at [$ amount] per hour.
8. Client responsibilities
Client will give Provider timely access to the information, accounts and approvals Provider needs, and will name one main contact: [name and email]. Delays caused by Client do not reduce the monthly fee.
9. Term, renewal and cancellation
This Agreement starts on [start date]. It runs for an initial term of [number] months and then continues month to month.
After the initial term, either party may cancel by giving at least [30] days' written notice. Either party may cancel immediately by written notice if the other party seriously breaks this Agreement and does not fix it within [10] days of being told.
When this Agreement ends, Client pays for the Services provided and approved extra work up to the end date. If Client has prepaid for a month and the Agreement ends partway through it because Provider cancels without cause, Provider will refund the unused part of that month's fee on a pro-rata basis.
10. Ownership of work
Once Client has paid for it, Provider assigns to Client all rights, including copyright, in the finished work Provider creates specifically for Client under this Agreement. Provider keeps ownership of its pre-existing materials, general tools, templates and know-how, and gives Client a non-exclusive, permanent licence to use any of them that are built into the finished work. Provider may show non-confidential finished work in its portfolio unless Client says no in writing.
11. Confidentiality
Each party will keep the other's non-public business information confidential and use it only for this Agreement, during the Agreement and for [2] years after it ends. This does not cover information that is public, already known to the receiving party, or required to be disclosed by law.
12. Independent contractor
Provider is an independent contractor, not an employee. Provider controls how, when and where the Services are performed (within the availability in section 7), uses its own equipment, may work for other clients, and is responsible for its own taxes and insurance. Provider will give Client a completed IRS Form W-9 before the first payment if Client asks for one.
13. Limitation of liability
Except for breaches of confidentiality or amounts owed under this Agreement, neither party is liable for indirect or consequential losses, and each party's total liability under this Agreement is limited to the fees paid in the [3] months before the claim arose, to the extent permitted by law.
14. General terms
Entire agreement. This Agreement is the entire agreement about the Services and replaces earlier proposals.
Amendments. Changes to the Services, fee or Included Hours must be in writing and signed (or confirmed by email) by both parties.
Governing law. This Agreement is governed by the laws of the State of [State].
Severability. If any part of this Agreement is found invalid, the rest stays in effect.
Notices. Notices go to the addresses above or to [email addresses].
Counterparts and electronic signatures. The parties agree this agreement may be signed electronically and in counterparts, and an electronic signature has the same effect as a handwritten one.
Signatures
Client
Signature: ______________________________
Name: [full name]
Date: [date]
Service Provider
Signature: ______________________________
Name: [full name]
Date: [date]