Remote delivery makes billable categorization harder; Everhour keeps task-level time visible across distributed project work.
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For remote teams, the core question is not only "how many hours were worked?" It is "which approved hours are billable to the client, at which rate, and under which engagement model?" Time-and-materials work uses direct labor hours multiplied by fixed hourly rates for each labor category. Fixed-fee, subscription, managed-services, and performance-based work still need time totals to check margins and implied rates.
Remote work adds a classification problem. Team members often contribute from different time zones, tools, and schedules, so billable delivery, internal coordination, rework, and admin time need consistent labels. SPI's 2024 professional services benchmark reported that 67.9% of billable delivery hours were remote, so remote teams need the same billing discipline as on-site teams, with clearer time-entry habits.
Start with approved billable hours, then multiply each role's hours by its agreed rate. For example, a remote implementation sprint includes 32 approved billable design hours at $125 per hour, 21 approved billable development hours at $150 per hour, and 10 approved project-management hours at $110 per hour. The pre-tax billable amount is $8,250.
Keep taxes separate from the labor subtotal unless the invoice rules for the client location require a taxable-service charge. The United States has no federal VAT/GST or national sales-tax rate for billed professional time. Sales tax treatment is state and local, and some services are not taxed. A U.S. billable-hours total needs a jurisdiction-specific tax input only when the service is taxable.
Billable hours, utilization, realization, collection, and effective billing rate answer different management questions. SPI defines employee billable utilization as annual billable hours divided by a 2,000-hour annual utilization base. In its 2024 benchmark, professional services consultants averaged 1,385 billable hours, 670 non-billable hours, and 2,055 total annual hours, producing 68.9% average employee billable utilization.
Do not use utilization as a shortcut for invoice value. Billing realization is amount billed divided by the standard value of recorded time before write-downs or discounts. Collection rate is amount collected divided by amount billed. Effective billing rate is collected revenue divided by total available hours. A remote team can show healthy utilization and still lose margin through discounts, unpaid invoices, or too much non-billable coordination.
A one-off calculation is enough when you are checking one invoice, pricing a small change request, or estimating whether a remote project stayed within an agreed budget. You need approved billable hours, rates, and any taxable-service input that applies. The result gives a clean subtotal and a useful check against the contract or statement of work.
A managed workflow is better when entries come from multiple time zones, projects, and tools. Remote teams need continuous time capture, billable flags, review before invoicing, and a handoff to billing records. Everhour Time Tracking captures task and project hours through timers or manual entries, supports approvals and locked periods, and feeds the reviewed time into reporting, budgeting, invoicing, and payroll review.
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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Remote teams should define billable hours by contract, project scope, and client approval rules. Time spent on deliverables, implementation, client meetings, and approved support is usually billable when the agreement says so. Internal coordination, recruiting, general training, and unmanaged rework are commonly non-billable unless the contract includes them.
Use billable amount = approved billable hours × agreed hourly rate. If different people or roles have different rates, calculate each line separately and add the results. For time-and-materials work, the labor component is based on direct labor hours multiplied by the fixed hourly rates listed for the relevant labor categories.
The biggest mistake is mixing worked time with approved billable time. Remote teams often record internal handoffs, status updates, and troubleshooting in the same tools as client work. If those entries are not marked consistently, the invoice total includes non-billable time or excludes valid client work, which distorts revenue and utilization.
Utilization targets compare billable hours with available working capacity, not with total hours entered in a tool. SPI reports that many professional services executives target at least 75% billable utilization, or about 1,500 hours per year. Senior consultants can bill less and junior consultants can exceed 2,000 hours, so role expectations matter.
No. The United States has no federal VAT/GST or single national sales-tax rate for billed professional time. Tax treatment is state and local, and some services are not taxed. Use the client, service type, and applicable jurisdiction to decide whether to add a taxable-service input to the billable-hours subtotal.
Everhour Time Tracking captures task and project hours through live timers or manual entries, including tracking inside supported tools such as Asana, ClickUp, Jira, GitHub, Monday, Notion, Trello, and Basecamp. Admins can use reminders, approvals, locked periods, and timer rules before time moves into billing review.
Everhour Billing & Invoicing turns tracked billable time and expenses into client invoices. It calculates invoice amounts from rates, time, and billable expenses while excluding non-billable work, then can export invoices to QuickBooks Online, Xero, or FreshBooks as drafts for accounting follow-up.
Track approved remote work by task and project, then move reviewed time into billing with Everhour Time Tracking for cleaner invoices and fewer manual handoffs.
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