A retainer is money a client pays in advance to secure your availability or to fund work you'll do later. It comes in two common forms: a draw-down retainer is a sum you bill against as the work is done, and an availability retainer is a fixed recurring fee for being on call, whether or not the client uses the time. Your agreement should say which one it is and what happens to unused hours or money. On the invoice, name the period and what the retainer covers, and on later invoices show how much has been used and what's left. Example: “Retainer, October: up to 10 hours of support, €800 excluding VAT”; if 6 hours are used, the next invoice records 4 hours unused and says whether they carry over. Common mistakes: recording a whole draw-down retainer as income in the month it arrives, when part of it may still be unearned or refundable, and billing it as a vague “Services” line. In the EU, VAT on an advance payment becomes chargeable when you receive it (Article 65 of the VAT Directive).
What is a retainer?
Put it on a real invoice.
Free forever — make a professional invoice in under a minute.