The analysis of nutrient budgets is a common method for assessing the bioge
ochemical function of estuaries including denitrification and nutrient rete
ntion rates. The Land Ocean Interactions in the Coastal Zone (LOICZ) guidel
ines for constructing such budgets concentrate on the simplest case where a
n estuary or embayment is treated as a single box which is well-mixed both
vertically and horizontally and at steady-state. We show that these simplif
ying assumptions can lead to significant and sometimes very large errors in
estimates of internal retention (or production) rates. If the load to an e
stuary varies significantly through the year, the use of time-averaged conc
entrations of nutrient and salinity to calculate retention rates is shown t
o cause errors of up to 30% depending on the circumstances. The second case
considered examines the consequences of treating an estuary which has sign
ificant long-estuary salinity and nutrient gradients as a well-mixed box. I
n a simple case considered, the calculated internal production from a distr
ibuted source is underestimated by a factor of two. The errors are shown to
depend on the estuary's mixing and geometrical characteristic as well as o
n the location of the nutrient source. The third case considers the errors
in the calculated internal retention/production rates of treating an estuar
y with a two-layer circulation as a single-box system. The potential errors
are severe. A comparison between a one-box analysis and a two-box analysis
which accounts for the true estuarine circulation shows that the two analy
ses can yield calculated retention rates of opposite sign. In this situatio
n, one configuration for the estuary would appear to sequester nutrient, wh
ereas the other would be a net exporter of nutrient.