Everhour tracks project time, while utilization math shows how much work becomes client-chargeable revenue.
Track billable vs. non-billable time and see your real utilization rate and revenue potential in seconds.
Working hours in the period
Admin, meetings, internal work
Industry average is 75–80%
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Measurement
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Tracked hours flow straight into a polished invoice — no copy-paste, no manual math.
This calculation answers two connected questions: how much client-chargeable time you have, and what share of total working time it represents. Billable hours show the time eligible for invoicing. Utilization shows the percentage of worked time spent on billable work instead of internal meetings, admin, training, or other non-billable activity.
The result matters for pricing, staffing, monthly close, and performance review. A freelancer can check whether a week produced enough billable value. An agency owner can compare capacity against client demand. A finance or operations lead can see whether a team is busy in a way that creates revenue, not just busy in total hours.
Start with approved billable hours, approved non-billable hours, and the billing rate. Total worked hours equals billable hours plus non-billable hours. Billable value equals billable hours multiplied by the hourly rate. Utilization equals billable hours divided by total worked hours, then multiplied by 100.
For example, a consultant logs 28 approved billable hours and 12 approved non-billable hours in one week. Total worked time is 40 hours. At $155 per hour, the billable value is $4,340. Utilization is 28 divided by 40, or 70%. That 70% is a workload metric; the $4,340 is the pre-tax client billing value before write-downs, discounts, or expenses.
A common mistake is treating high utilization as the same thing as full invoice recovery. Utilization only compares billable time with total worked time. It does not prove that every billable hour was invoiced, approved by the client, or collected. Write-downs, fixed-fee caps, discounts, and disputed entries can all reduce billed or collected revenue.
Keep four metrics separate: utilization, realization, collection, and effective billing rate. Utilization is billable hours divided by total worked hours. Realization compares billed value with standard billable value. Collection compares cash collected with billed value. Effective billing rate divides collected or billed revenue by hours worked, depending on the question you need to answer.
U.S. billable-hour totals are normally stated in U.S. dollars. The United States has no federal VAT/GST or single national sales-tax rate for billed professional time. When tax applies, it is a state and local input, not a federal baseline. Some services are not taxed, and taxable services vary by jurisdiction.
For a one-off estimate, calculating billable value before tax is usually enough. Add a jurisdiction-specific tax input only when the service is taxable where the billing activity occurs. For example, Texas taxable services use a 6.25% state sales and use tax rate, with local jurisdictions able to bring the combined rate up to 8.25%.
A calculator is enough when you need a quick check for one person, one project, one date range, and one hourly rate. It also works for a pre-invoice sanity check before approval. The manual approach breaks down when people work across multiple projects, rates, billing statuses, and approval rules.
A managed workflow gives you a durable record: continuous time capture, billable and non-billable flagging, approval before billing, locked periods after close, and a clean handoff to invoicing or payroll review. Everhour Time Tracking supports timers and manual entries against tasks and projects, including tracking inside supported project tools.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
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Summer 2026
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Summer 2026
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Divide approved billable hours by total worked hours, then multiply by 100. If someone works 40 hours and 30 are billable, utilization is 75%. Use total worked hours in the denominator, not scheduled capacity, unless your internal policy defines utilization against expected capacity instead of actual logged time.
Yes, if the work is logged as non-billable, it belongs in total worked hours but not in billable hours. Client strategy calls, proposal work, warranty fixes, and admin time can all lower utilization. That is useful because it shows how much capacity supports clients without directly creating invoiceable time.
Utilization measures time mix: billable hours divided by total worked hours. Realization measures billing recovery: billed value divided by standard billable value. A person can have 80% utilization and still have low realization if the invoice is written down, capped by a fixed fee, or reduced after client review.
No. Tax does not change utilization because utilization is based on hours, not invoice totals. Tax changes the final amount due only when the service is taxable in the relevant state or local jurisdiction. The United States has no federal VAT/GST or national sales-tax rate for billed professional time.
Write-downs should reduce billed value or realization, not the original billable-hours record, unless your policy reclassifies the time before approval. Keep the original approved billable time visible so managers can see work performed, pricing leakage, and client recovery as separate facts instead of one blended number.
Everhour Time Tracking records task and project hours through live timers or manual entries, including inside supported project tools such as Asana, ClickUp, Jira, GitHub, Monday, Notion, Trello, and others. Those entries can feed timesheets, approvals, reports, budgets, invoicing, and payroll review.
Everhour lets admins set project billing status and mark specific tasks as non-billable inside billable projects. Reports can include billable time, non-billable time, billable amount, and cost, so teams can review utilization and billing value without rebuilding the numbers in a spreadsheet.
Track approved hours, billable status, and project context before the invoice stage. Everhour turns daily time capture into cleaner utilization reporting and billing handoffs.
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