How to Invoice a Retainer
A retainer is an arrangement where a client pays you in advance for your time or your availability — either as a fixed fee each period, or as a prepaid balance that your work is billed against. It steadies your income and guarantees the client a place in your schedule — but only if the invoices make clear what the money buys and what happens when the work runs over or under.
This guide covers the two main kinds of retainer, how to invoice each one, how to report usage, and how to handle overages and unused hours.
Two kinds of retainer
A fixed retainer is a set fee — say $3,000 a month — that secures an agreed amount of your time or simply your priority. Each month is invoiced on its own and stands alone; the fee isn't later deducted from anything.
A drawdown retainer is a prepaid balance that your work is billed against. The client pays, for example, $5,000 up front, you report hours against it as you work, and the client tops it up when it runs low.
Say which kind you're offering in the agreement. Many retainer disputes start with one side assuming the other.
Invoicing a fixed retainer
Invoice the fee at the start of each period, with the period and the scope on the line: "Monthly retainer, up to 20 hours of design work, October 2026" at $3,000. Keep the scope visible every month, because it's what the client is paying for.
Track your hours even though the fee is fixed. A retainer that covers 20 hours but consistently takes 35 is a pricing conversation you'll want to have with evidence in hand.
Invoicing a drawdown retainer
Issue the first invoice for the prepaid amount, described as a retainer for future services, before work starts. Then, each period, send a usage statement or invoice showing the opening balance, the work done with hours and rates, and the closing balance.
For example: opening balance $5,000, 14.5 hours at $150 used ($2,175), closing balance $2,825. When the balance falls below an agreed floor, invoice the top-up promptly so work never stalls waiting for a payment.
In many VAT and GST systems, tax on a prepayment falls due when the money is received rather than when the work is done, so check how your local rules treat advance payments before you invoice the retainer. If the prepayment invoice already charged VAT or GST, make sure your usage statements don't charge it a second time on the same work.
Overages and unused hours
Decide in advance what happens beyond the retainer. A common approach is to bill extra hours on the next invoice as their own line, at an agreed rate above the retainer's effective hourly rate: $3,000 for 20 hours works out at $150 an hour, so the line might read "Additional hours beyond retainer, 6 at $160". Get the client's go-ahead before you exceed the retainer, not after.
Unused time needs a rule too. Some fixed retainers let a limited number of hours roll over to the next month and others let them expire, while drawdown balances are often refundable when the engagement ends; write whichever you choose into the agreement.
Retainers held in trust
In many countries, lawyers and some other regulated professionals must hold advance fees in a separate client or trust account until they're earned. If that applies to you, your regulator's client-money rules govern how the money is invoiced, held, and transferred, and they override anything in a general guide.