A free retainer
agreement template
A plain-language retainer agreement you can adapt in minutes, with bracketed placeholders for scope, included hours, overage terms and the billing period. Once it is signed, track the hours and invoice each period in Hour Cap.
What a retainer agreement should cover
Get these clauses right and both sides know exactly what is included and what costs extra.
Scope of services
List what is covered, and just as importantly, what is not. Work outside scope becomes a separate quote, not a surprise.
Included hours
State the hours included per period and whether unused hours roll over. Capacity reserved is capacity paid for.
Overage terms
Set the hourly rate for work beyond the included hours, and agree to flag it before you exceed the budget.
Billing period
Define the period (monthly or quarterly), when it starts and ends, and whether you bill in advance or in arrears.
Payment terms
Spell out the fee, the due window, and any late-payment interest so cash flow is predictable.
Termination
Agree the notice period and confirm that used hours up to the end date remain payable.
Pair it with a statement of work
Statement of work (SOW)
The retainer sets the commercial frame; the SOW says what you will actually do this period. Keep it short: deliverables, owners and any deadlines. When the SOW changes, the retainer does not have to.
Quote notes for out-of-scope work
When a request falls outside the retainer, quote it separately at your overage rate and reference the agreement. A quick written note that the work is additional protects the relationship and your margin.
Download the template
A plain-text retainer agreement skeleton with clearly marked bracketed placeholders for the parties, scope, included hours, overage rate, billing period, payment terms and termination. Adapt it in any text editor.
This template is a starting point, not legal advice. Have a qualified professional review it before use.
Once it is signed, track it in Hour Cap
The agreement sets the terms. The hard part is staying on top of how many hours you have used and how many are left before you eat into your margin.
Hour Cap retainers track hours used and remaining in real time, with alert thresholds that warn you before you run over, and can invoice each billing period straight through Xero.
Retainer tracking and the Xero integration are on the Team plan and above.
Common questions
What is a retainer agreement?
A retainer agreement is a contract where a client pays a recurring fee for an agreed amount of work each period. It sets out the scope, the included hours, what happens when those hours are exceeded, and the billing terms.
What should a retainer agreement include?
At minimum: the parties, the scope of services, the included hours per period, the overage rate for extra work, the billing period and fee, payment terms, and a termination clause. A short statement of work can sit alongside it for project detail.
Should unused hours roll over?
That is your call, but state it clearly. Many providers do not roll hours over, since the retainer reserves capacity. If you do allow rollover, cap how many hours carry and for how long.
How do I handle work beyond the included hours?
Set an overage hourly rate in the agreement and notify the client before you exceed the included hours. In the template, overage is a clearly marked clause with a bracketed rate to fill in.
Is this template legal advice?
No. The template is a starting point to adapt, not legal advice. Have a qualified professional review it for your jurisdiction before you use it.
How does Hour Cap help with retainers?
Hour Cap tracks hours used and remaining against each retainer, warns you with alert thresholds before you run over, and can invoice each billing period through Xero. Retainers are on the Team plan and above.
More templates
Run retainers without the guesswork
Track hours used and remaining, get alerts before you run over, and invoice each period through Xero. Retainers and Xero are on the Team plan, from $10 a month.