Small firms mix hourly and fixed-fee work; Everhour keeps time capture tied to tasks, approvals, and billing.
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%
The calculator gives you the number — Everhour takes it from there.
One click and you're timing. Start a timer, add an entry, edit the details. This is exactly how it feels in Everhour.
Set a budget, assign rates, and get alerted before you're over.
Measurement
Track your budget through time or costs
Every report you need — configured your way, always up to date.
Tracked hours flow straight into a polished invoice — no copy-paste, no manual math.
For a small professional-services business, the calculation answers three practical questions: how much billable time should be invoiced, what that time is worth at the actual bill rate, and whether expenses or tax inputs change the total. The core total is in U.S. dollars because U.S. coins and currency, including Federal Reserve notes, are legal tender for debts, public charges, taxes, and dues.
The result matters for time-and-materials invoices, fixed-fee reviews, monthly retainer checks, and capacity planning. SPI Research reported that professional-services organizations with under 10 employees averaged 1,326 billable hours and 716 non-billable hours per consultant in its 2022 benchmark. That mix explains why small firms need both invoice math and a view of non-billable work that reduces effective revenue.
Use this formula for time-and-materials work: actual bill rate × billable hours + rebillable expenses. If different roles or tasks have different rates, calculate each line separately before adding them together. Tax is not a single national add-on in the United States. There is no federal VAT/GST, and sales tax treatment is state and local when a service is taxable.
For example, a small consulting business invoices 32 approved strategy hours at $145 per hour and 6 approved implementation-support hours at $95 per hour. The labor value is $4,640 plus $570, or $5,210. If the engagement includes $240 of rebillable software expense, the pre-tax invoice subtotal is $5,450 before any jurisdiction-specific tax input or client-specific discount.
Small businesses often sell both hourly and fixed-fee work. SPI reported that professional-services organizations with under 10 employees had 46.0% of work sold as time and materials and 45.5% sold as fixed time or fixed fee. That split makes billable-hour math useful even when the client never sees an hourly line item, because it reveals whether a flat fee still covers the work performed.
Do not confuse billable hours with revenue quality. Utilization is billable hours divided by available hours, billing realization is amount billed divided by the standard value of work, and collection rate is cash collected divided by amount billed. A small firm can show healthy billable hours and still lose margin through write-downs, unpaid invoices, or too much non-billable administration.
A one-off calculation is enough when you have a clean set of approved hours, one invoice, stable rates, and a clear expense total. It also works for quick fixed-fee checks, such as comparing the implied hourly rate on a completed project with the rate you expected when pricing the work.
A managed workflow becomes necessary when several people log time, rates change by project, managers approve entries, or invoices need a reliable handoff. Everhour Time Tracking supports timers and manual entries against tasks and projects, then feeds approved timesheets, reporting, budgeting, invoicing, and payroll review without rebuilding the same billing data by hand.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
High Performer
G2
Summer 2026
Best Ease Of Use
Capterra
Summer 2026
Rated in the top time trackers across G2, Capterra, and TrustRadius — with consistent praise for ease of use, integrations, and support.
Count time spent on approved client work that the engagement allows you to charge, such as delivery, implementation, review, or client-requested project work. Exclude internal administration, sales, training, rework you choose not to bill, and tasks marked non-billable by policy or contract. Keep the category decision separate from the math.
For fixed-fee work, divide the fee by the approved billable hours to find the implied hourly rate. If a $6,000 project absorbs 50 billable hours, the implied rate is $120 per hour. Compare that figure with the standard rate, expected margin, and non-billable support time before pricing similar work again.
No. The United States has no federal VAT/GST or national sales-tax rate for billed professional time. Tax treatment is state and local, and services can be taxable, exempt, or treated differently by jurisdiction. Use a jurisdiction-specific tax input when the service is taxable.
Utilization does not change the invoice subtotal, but it changes how you read the business result. SPI defines employee billable utilization as annual billable hours divided by a 2,000-hour annual base, and its benchmark target for professional-services organizations is 75%, or 1,500 billable hours. Lower utilization means fewer revenue-producing hours across the same capacity.
The common mistake is multiplying all worked hours by the client rate. That overstates revenue when internal admin, sales, training, unpaid rework, or contract-excluded tasks are included. Start with approved billable hours only, then apply the correct rate, add rebillable expenses where allowed, and handle tax separately by jurisdiction.
Everhour Time Tracking captures task and project hours through live timers or manual entries, including work logged inside supported project tools. Admins can approve timesheets, lock completed periods, set reminders, and use timer rules before hours move into billing or payroll review.
Everhour Billing & Invoicing converts tracked billable time and expenses into invoices using project, member, or task rates while excluding non-billable work. Invoice data can be grouped by project, task, person, date, or another available breakdown before export to QuickBooks Online, Xero, or FreshBooks.
Track approved task hours, lock reviewed periods, and move billable work into invoices with Everhour Time Tracking for small-business billing discipline.
14-day free trial · No credit card · Cancel anytime
