Billable work often mixes rates, exclusions, and local tax inputs. Everhour keeps those hours organized before invoicing.
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A billable-hours calculation answers one practical question: how much approved client work is worth at the agreed billing rate. On Windows, the math is the same as on any other platform, but a desktop workflow gives you room to keep the source timesheet, engagement letter, and invoice draft open side by side while checking the numbers.
The result is usually a pre-tax service total in U.S. dollars. The United States has no federal VAT/GST or national sales-tax rate for billed professional time, so any tax input must come from the state and local jurisdiction where the service is taxable. Non-billable work stays outside the invoice total but still matters for margin review.
Start by sorting every time entry into billable or non-billable. Billable time is work the client agreed to pay for under the contract, statement of work, engagement letter, or rate schedule. Non-billable time includes internal administration, training, business development, unapproved overages, write-downs, or work that the agreement excludes from invoicing.
The common mistake is applying a rate to total hours worked instead of approved billable hours. If a consultant worked 44 hours but only 36 hours were approved for billing, the invoice starts from 36 hours. The remaining 8 hours still affect profitability, capacity, and staffing decisions, but they do not belong in the client-facing billable amount.
The basic formula is billable amount = approved billable hours × billing rate. When a matter, project, or invoice has multiple rates, calculate each rate group separately and add the results. Use the rate communicated in the contract, policy, or written fee agreement; for U.S. lawyers, ABA Model Rule 1.5 requires the basis or rate of fees and expenses to be communicated in writing for new client-lawyer relationships, subject to its limited low-cost exception.
For example, a data-migration project includes 17 approved architecture hours at $185 per hour and 19 approved configuration hours at $120 per hour. Architecture produces $3,145, and configuration produces $2,280. The pre-tax billable amount is $5,425. If 6 internal coordination hours were also logged as non-billable, total work time is 42 hours, but the invoice still uses only the 36 approved billable hours.
For U.S. service invoices, do not add a national tax rate. The United States uses state and local retail sales taxes rather than a federal value-added tax or goods and services tax. Some services are not taxable in a specific location, while other services are taxed based on state and local rules.
When a service is taxable, use the jurisdiction-specific rate that applies to that invoice. New Mexico gross receipts tax includes performing services in New Mexico, with combined rates from 5.125% to 8.6875% depending on business location. Texas taxable services use a 6.25% state rate, with local tax up to an 8.25% combined maximum. Hawaii applies general excise tax rather than sales tax, usually 4% plus county surcharge where applicable.
A calculator is enough when you need a single check: one invoice, one rate table, one client, and a short list of approved entries. Use it before sending an invoice draft, especially when you need to verify write-downs, excluded tasks, or the pre-tax amount in U.S. dollars.
A managed workflow becomes necessary when multiple people log time, rates differ by person or task, non-billable work must remain visible, or invoices need review before delivery. Everhour supports billable and non-billable time through project billing status, task-level non-billable controls, custom task rates, member-rate exceptions, and admin reports for billable time, non-billable time, billable amount, and cost.
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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Add only approved billable hours, group them by billing rate, multiply each group by its rate, and add the group totals. Windows does not change the calculation. Use the desktop space to compare the source timesheet, client agreement, and invoice preview so excluded hours and rate changes do not slip into the total.
You need approved billable hours, the applicable billing rate for each hour group, any non-billable exclusions, and any jurisdiction-specific tax input when the service is taxable. For U.S. invoices, use U.S. dollars and do not apply a federal VAT/GST because the United States does not have one.
Non-billable work should not increase the client-facing invoice amount. Keep it in your internal records so you can measure margin, staffing pressure, write-downs, and project efficiency. Mixing non-billable administration or unapproved overages into the billable total overstates the invoice and weakens the audit trail.
Only when the applicable state and local rules tax that service. There is no single U.S. national sales-tax rate and no federal VAT/GST. A taxable service in Texas, New Mexico, or Hawaii can require a different input, while another service or location can require no sales-tax line at all.
Payment timing matters after the invoice amount is calculated. For federal-agency vendor invoices, Prompt Payment rules generally use the contract date, accepted discount terms, an accelerated-payment rule, or 30 calendar days after receipt of a proper invoice. The federal Prompt Payment interest rate is 4.125% for January 1 through June 30, 2026.
Everhour lets admins set project billing status, mark specific tasks as non-billable, and handle member-rate exceptions where needed. Reports can show billable time, non-billable time, billable amount, and cost, so invoice totals and internal margin checks stay separate.
Everhour supports project rates, member rates, and custom task rates for time-and-materials work. That lets a team price architecture, implementation, support, or review work differently without rebuilding the invoice math manually from raw timesheet rows.
Track billable and non-billable work by project, task, or member rate in Everhour, then review billable amount, cost, and non-billable time before clearer client billing.
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