China bills professional services in RMB with VAT rules that affect client totals. Everhour keeps approved time organized for reporting.
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A billable-hours calculation answers three questions: how much approved time is chargeable, what that time is worth at the agreed rate, and what the client owes after VAT. In China, the currency is renminbi yuan, shown as RMB or CNY. The basic labor total still comes from hours multiplied by rates, but VAT can change the invoice amount the client must pay.
The calculation is especially useful when you price work by role, task, matter, or project phase. It also helps separate chargeable time from internal coordination, admin, write-offs, or capped work. For China invoices, keep the pre-tax service amount clear because output VAT is calculated on the VAT-exclusive sales amount, not on a vague all-in estimate.
Start with each approved time category: billable hours × agreed hourly rate. Add the line totals to get the VAT-exclusive service amount. Then apply the relevant VAT rate. For a general VAT taxpayer, sales of services and intangible assets are taxed at 6% unless they fall into listed 13%, 9%, or zero-rated categories.
For example, a China advisory project includes 18 approved compliance-review hours at RMB 900 per hour and 11 approved documentation hours at RMB 650 per hour. The pre-tax service amount is RMB 23,350. At the 6% general VAT taxpayer service rate, output VAT is RMB 1,401, making the invoice total RMB 24,751 before any contract-specific discount or reimbursable expense.
The common mistake is treating the hourly fee as the final amount without checking VAT status. Paid sales of services in China are taxable VAT transactions when the service is consumed in China or the seller is a Chinese domestic entity or individual, unless a statutory exclusion applies. That makes VAT treatment part of the billing calculation, not a separate accounting afterthought.
Eligible small-scale taxpayers use a 3% simplified VAT collection rate when annual taxable VAT sales do not exceed RMB 5 million. Cross-border sales of services or intangible assets by Chinese domestic entities or individuals are zero-rated only when they are within the scope specified by the State Council. Do not apply a zero rate merely because the client is overseas.
A one-off calculation is enough when you have approved hours, agreed rates, clear VAT status, and a single invoice to prepare. It is also enough for a quick estimate before sending a quote. Contract terms still control payment timing because PRC law does not set a general statutory payment term for all commercial invoices.
A managed workflow is better when several people record time, rates differ by role, or invoice support needs an approval trail. Everhour Reporting can group logged time by project, client, member, or task, add billable amount and cost columns, and export reports in CSV, Excel/XLSX, or PDF before billing.
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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Multiply approved billable hours by the agreed hourly rate for each role or task, then add the line totals. Use RMB for China invoices unless the contract requires another currency; non-RMB sales amounts must be converted into RMB for VAT calculation. Add VAT after you have the VAT-exclusive service amount.
For a general VAT taxpayer, sales of services and intangible assets are taxed at 6% unless the service falls into listed 13%, 9%, or zero-rated categories. Eligible small-scale taxpayers, defined by annual taxable VAT sales not exceeding RMB 5 million, use a 3% simplified VAT collection rate.
China does not set a national billable-hour increment for professional services. For lawyer services, national guidance says fee items, billing methods, and fee standards are in principle set by the law firm and filed annually with the local lawyers association. Other professional billing increments are usually contractual.
Add VAT after multiplying hours by rates and adding the VAT-exclusive service lines. China's output VAT formula is sales amount × VAT rate. If you apply 6% VAT to the final service amount, the VAT line stays auditable and the client can see the taxable base separately from the tax.
The biggest mistake is mixing taxable service value, VAT, and non-billable time in one total. Keep approved billable hours separate from internal work, multiply only chargeable time by the correct rate, and then apply the correct VAT treatment. Taxpayers must issue and use VAT invoices lawfully, and electronic VAT invoices have the same legal effect as paper VAT invoices.
Everhour Reporting lets admins build reports with 45+ columns, including client, project, member, billable time, billable amount, labor costs, and invoice status. Reports can be grouped, filtered, exported, or scheduled by email, giving billing reviewers a cleaner basis for China invoice preparation.
Use Everhour Reporting to group billable work by client, project, member, or task, then export the figures for invoice review with fewer spreadsheet rebuilds.
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