The agency retainer model charges clients a fixed monthly fee for an agreed set of deliverables, hours or ongoing services, usually with a three- to twelve-month minimum term. The strongest agencies package retainers as tiers with written scope, bill in advance by direct debit, price extra work from a rate card, and keep any single client below 10% of revenue.
Key takeaways
- Project revenue creates the feast-or-famine cycle. Retainers smooth it, but only if the scope is written down.
- Sell deliverables or outcomes, not a bank of hours, wherever the work is predictable.
- Keep ad spend and media costs out of your fee, so client budgets don't inflate your revenue and your risk.
- Watch client concentration: no client above 10% of revenue, top five below 25%.
- From 1 July 2027, retainers billed until canceled may count as subscriptions under Australian law, including for small business clients.
We'd put more than $200,000 into my business, a "results-guaranteed" marketing agency. The agency was growing. International clients were signing up. On paper it looked like a success story.
In the bank account it looked like a disaster.
Every dollar of revenue was a one-off project. We'd win a few launches and max out the team. Then the projects would wrap up, and I'd sit there wondering how I was going to pay everyone next month. Feast, then famine. Then feast again, if we were lucky.
I sold that agency. It wasn't a great financial result, but I learned the lesson that eventually became The Subscription Playbook: one-off revenue is a dangerous place to run a business from.
If you run an agency today, the fix is a retainer or subscription model. But a badly designed retainer can be just as dangerous as no retainer at all. Let me show you how to build one properly.
How Do Agency Retainers Work in 2026?
There are four common shapes. Each suits a different kind of agency.
| Retainer type | What the client buys | Best for | Main risk |
|---|---|---|---|
| Hours bank | A set number of hours each month | Dev, design support, ad-hoc work | Clients count hours, not value |
| Deliverables retainer | A defined list of outputs each month | Social, content, SEO, reporting | Scope creep at the edges |
| Productized subscription | One standard package, often "one request at a time" | Design, video, copy, web support | Heavy users |
| Performance hybrid | A lower fixed fee plus a share of results | Ecommerce and lead generation | Cash flow and control |
The productized version is the one that has changed the industry. Designjoy, a one-person design subscription, raised its price in steps from $449 a month to $5,000 a month as demand grew, and reached about $120,000 a month in revenue without paid advertising, according to a 2024 Indie Hackers interview. Its trick is a built-in limit: unlimited requests, but only one active at a time.
There's a newer shape too. Agencies building AI agents for clients now sell a build fee, a monthly retainer and token costs passed through. If that's you, read how much to charge for an AI agent.
For a side-by-side comparison of retainers and subscriptions, see retainers vs subscriptions.
Which of the Book's Eight Subscription Models Fit an Agency?
| Model | How an agency uses it | Fit |
|---|---|---|
| Bundled Services | Strategy, content, ads and reporting in one monthly fee | Primary |
| Minimum Commitment | A three-, six- or twelve-month term, then monthly | Strong |
| Unlimited Content (adapted) | "Unlimited requests, one at a time" design or video | Strong for productized agencies |
| Software as a Service | White-label dashboards, tools or AI agents you host | Good add-on |
| Member Benefits | A paid community or training for clients who want to DIY | Niche |
| Insurance, Boxes, Consumables | Rarely fit | Skip |
One small example from the book shows how software can lift an agency retainer. Cloud Campaign, a social media platform for agencies, found its "aha" moment was when an agency saw a white-labeled, one-click report with its own logo. That report let agencies charge a higher retainer for social media services. Reporting is part of the product, so make it look like one.
A Sample Three-Tier Agency Retainer
Here's an illustrative offer for a content and paid social agency serving small and mid-sized businesses. Prices are examples, ex-GST.
| Starter | Growth | Scale | |
|---|---|---|---|
| Monthly fee (ex-GST, illustrative) | A$2,500 | A$5,500 | A$9,500 |
| Social content | 12 posts a month, 2 channels | 20 posts a month, 3 channels, 4 short videos | 30 posts, 4 channels, 8 short videos |
| Paid ads management | Not included | Up to A$10,000 a month spend | Up to A$40,000 a month spend |
| Campaigns | Not included | 1 campaign a quarter | 1 campaign a month |
| Landing page and conversion work | Not included | Quarterly test | Monthly test |
| Reporting | Monthly report | Monthly report and call | Fortnightly call, live dashboard |
| Strategy | Annual plan | Quarterly plan | Quarterly workshop with leadership |
| Minimum term | 3 months | 6 months | 6 months |
| Ad spend | Paid by client directly | Paid by client directly | Paid by client directly |
Notice what's missing: hours. The client buys outputs. If you get faster, the margin is yours.
What should your retainer cost?
Work out a monthly retainer that covers your team's time, tools, GST and payment fees with the free Subscription Price Calculator.
Is Your Retainer Actually Profitable? A Worked Example
Most agencies price retainers from a competitor's website and hope. Do this sum instead.
Monthly contribution = Retainer fee − (Delivery hours × Loaded cost per hour) − Tools and software − Payment fees
Worked example: the Growth retainer (illustrative, ex-GST)
Fee: A$5,500 a month.
Delivery: 38 hours a month across content, ads, reporting and account management. Loaded team cost (salary, super, overheads) is A$70 an hour: A$2,660.
Tools: scheduling, design, reporting and AI subscriptions allocated to this client: A$250. Direct debit fees at about 1%: A$55.
Contribution: 5,500 − 2,660 − 250 − 55 = A$2,535 a month, or 46%.
Month four: the client asks for "a quick extra video," two extra report versions and an urgent weekend post. Hours hit 55. Time now costs A$3,850 and contribution drops to A$1,345, or 24%. That's half your profit gone without anyone noticing.
The fix isn't to refuse the client. It's a rate card for extras, a monthly report showing what was delivered, and a conversation about Scale when they're consistently over.
Use the Subscription Price Calculator to test your own tiers, and the Consulting Rate Calculator to find your loaded hourly cost if you don't know it.
Subscription Price CalculatorWork out a profitable monthly price after costs, GST and fees.Open the free tool →How to Move Your Agency From Projects to Retainers
- List your last 20 projects. Which clients came back? What did they buy again? That repeat work is your first retainer.
- Design three tiers around outcomes. Name them for the client's stage, not your service lines.
- Write the scope as deliverables. "20 posts a month across three channels" can be checked. "Social media support" can't.
- Set the minimum term and notice period. Three to six months, then monthly with 30 days' notice.
- Build the rate card. Every common extra (videos, landing pages, rush jobs) gets a price before anyone asks.
- Offer it at the end of every project. "Want us to keep this running?" is the easiest sale you'll ever make.
- Bill in advance on the first of the month. By direct debit or card on file.
- Report monthly. What you did, what it achieved, and what's next.
Five Agency Retainer Pitfalls (Some I Learned the Hard Way)
Results guarantees. My agency offered payment on results. It helped us grow, and it drained our cash. If you share in results, keep a fixed base fee that covers delivery, and only do it when you control the levers.
Client concentration. In the book's MOATS framework, no single client should be more than 10% of revenue, and your top five should be below 25%. A retainer client at 40% isn't recurring revenue. It's a single point of failure. Score yourself with the MOATS Scorecard and read the MOATS framework.
Ad spend in your revenue. Paying Meta or Google on your card and re-billing it looks like growth. It's really credit risk. Let clients pay platforms directly.
Unused retainers. A client who isn't using the retainer will eventually cancel it. A short monthly summary stops "what are we paying for?" before it starts.
AI price deflation. If clients can see that a task now takes minutes, they'll push back on paying for hours. Price the outcome, and spend the time you save on strategy.
What Australian Rules Apply to Agency Retainers?
General information as at October 2026, not legal advice.
Subscription rules from 1 July 2027. A retainer that rolls on monthly until canceled may be a subscription contract under the Unfair Trading Practices Act 2026. The notice and easy-exit duties also protect small business clients on standard form contracts (fewer than 100 employees or turnover under A$10 million). Expect to provide clear upfront terms, prescribed reminders and a straightforward way to cancel. See Australia's subscription trap laws.
Unfair contract terms. Auto-renewals, one-sided price changes and heavy exit fees in standard agency contracts with small businesses can be challenged. The ACCC's contracts guidance is the place to check.
Results claims. "Guaranteed page one" or "triple your leads" claims in your own marketing must be accurate. The ACCC's guidance on false or misleading claims applies to agencies too.
GST. Once your GST turnover is A$75,000 or more you must register, per the ATO. Retainers to Australian clients then generally include 10% GST. Re-billed ad spend can complicate your BAS, which is another reason to keep it out of your invoices.
The Accountant's Angle: Why Retainers Change What Your Agency Is Worth
Look at the book's comparison. The average small business sells for around 0.67 times revenue, often to a buyer who's nervous about how much of that revenue will still be there next year.
Agencies have it worse than most, because project revenue walks out the door with the founder.
Retainers change the conversation in three ways:
- Cash flow becomes predictable, so you can hire ahead of demand instead of after it.
- Revenue quality improves. A buyer can see contracted monthly fees, minimum terms and how long clients stay.
- Concentration becomes visible, and you can fix it before a buyer finds it.
To see what moving from projects to retainers would do to your revenue, cash flow and valuation, run the Subscription vs One-off Profit Calculator.
Free Subscription Profit Review
Australian business owners can book a free 30-minute review with a BPAG Accountants adviser. An honest conversation about:
- whether a subscription model could work for your business
- how recurring revenue could cover your fixed costs each month
- how it could lift what your business is worth
No cost, no obligation. General information only until we understand your situation.
What to Do Next
Look at your current client list and answer one question: what percentage of last month's revenue will definitely arrive next month?
If it's under 50%, start with step one above. Find the work clients keep coming back for, package it into three tiers, and offer it at the end of your very next project.
I wish someone had made me answer that question before I put $200,000 on the line.
Frequently asked questions
How much should an agency charge for a monthly retainer?
Start from the value of the outcome for the client, then check it against your delivery cost: hours times your loaded cost per hour, plus tools. Aim for a fee that leaves a healthy margin even if the client uses 20% more time than you budgeted. The illustrative tiers on this page run from A$2,500 to A$9,500 a month, but your market and niche will set the real range.
Should ad spend be included in a retainer?
Usually not. Keep media spend separate and have the client pay the platforms directly, or bill it at cost with clear approval. Bundling spend into your fee inflates your revenue, exposes you to the client's payment risk, and makes your margin look smaller than it is. Charge a management fee that is tied to scope or tiered by spend band.
What's a fair minimum term for an agency retainer?
Three months is common for marketing work, because most campaigns need time to show results. Six to twelve months suits strategy, SEO and content programs. After the minimum, roll monthly with a 30-day notice period. Under Australian unfair contract terms rules, very long lock-ins or heavy exit fees in standard contracts with small businesses can be challenged.
Are performance-based agency fees a good idea?
Only in narrow cases. My first agency offered payment on results and it grew fast, but cash flow was brutal and margins were thin. If you do it, use a lower fixed fee plus a share of results, only for clients whose product already sells and where you control the levers that drive the result.
How do AI tools change agency pricing?
AI cuts the time needed for first drafts, reporting and creative variations, which makes hourly pricing less attractive for the agency. Pricing by deliverable or outcome lets you keep the efficiency gain. Some agencies now sell AI agents with a build fee plus a monthly retainer and token costs passed through. Clients will still pay for strategy, judgment and results.
General information only, current as at October 2026. It isn't legal, tax or financial advice and doesn't consider your circumstances. Speak to a qualified adviser before acting.
Talk it through with a BPAG adviser
Free for Australian business owners: a 30-minute Subscription Profit Review on whether a subscription suits your business.
Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- Indie Hackers: How Designjoy got from $0 to $120k/month with no paid advertising (8 February 2024)
- Recurly, Churn rate benchmarks (July 2026 network data)
- Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (No. 64, 2026)
- ACCC: Contracts and unfair contract terms
- ACCC: False or misleading claims
- ATO: Registering for GST
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.