Everhour turns tracked billable time into invoices, while your rate math still starts with approved hours and pricing rules.
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A billable rate calculation answers how much client-facing revenue each approved billable hour produces. It can use a single hourly rate, multiple role rates, a target invoice amount, or a blended average across a team. The result helps you quote new work, check an invoice total, or compare billed revenue with the time spent delivering the work.
The key distinction is billable time versus total work time. Billable time is the approved client-chargeable portion. Non-billable work, internal review, admin time, and write-downs affect profitability, but they should not be quietly folded into the client rate unless you are calculating an effective internal yield.
The basic invoice formula is billable hours multiplied by the applicable billable rate. When a project has one rate, the calculation is direct. For 32 approved billable hours at $150 per hour, the pre-tax billable amount is $4,800. If the client sees separate role rates, calculate each role line first, then add the line totals.
A blended billable rate divides the total billable amount by total approved billable hours. For example, 20 specialist hours at $180 per hour equal $3,600, and 12 coordinator hours at $120 per hour equal $1,440. The total is $5,040 across 32 billable hours, so the blended billable rate is $157.50 per hour.
For U.S. billing, amounts are normally shown in U.S. dollars. The United States has no federal VAT/GST or national sales-tax rate for billed professional time. Sales tax treatment is state and local, so add a jurisdiction-specific tax input only when the service is taxable under the relevant state or local rule.
Do not treat a write-down as non-billable time. A write-down means time was worked and recorded, but the billed amount was reduced before invoicing. Keep three figures separate: worked hours, approved billable hours, and billed amount. That separation protects realization rate, effective billing rate, and client-facing invoice math from becoming one unclear number.
A one-off calculator is enough when you need to check a simple rate, confirm a blended average, or review a proposed invoice before sending it. It is also enough for a small fixed set of hours where the rate and tax treatment are already known.
A managed workflow becomes necessary when people log time across tasks, managers approve billable entries, non-billable work must stay out of invoice totals, and invoices need a handoff. Everhour Billing & Invoicing converts tracked billable time and expenses into invoices while excluding non-billable tasks and keeping invoice status connected to billing reports.
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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For a single rate, multiply approved billable hours by the hourly rate to get the billable amount. For a blended billable rate, divide total billable amount by total approved billable hours. Do not include non-billable hours in the denominator unless you are intentionally calculating internal yield instead of a client-facing rate.
Calculate each role or task line separately, add the billable amounts, then divide by total approved billable hours. If one person bills at $180 and another bills at $120, combining the hours first gives the wrong answer unless both rates are identical. The weighted average must follow the dollars, not a simple average of rates.
Keep tax separate from the billable rate unless your agreement explicitly prices services tax-inclusive. In the United States, there is no federal VAT/GST or national sales-tax rate for billed professional time. State and local rules decide whether a specific service is taxable and what jurisdiction-specific tax input belongs on the invoice.
Billable rate is the client-facing hourly price applied to approved billable time. Effective billing rate is a performance measure: billed revenue divided by a chosen time base. If you divide billed revenue by all worked hours, including non-billable time, the effective rate will be lower than the stated billable rate.
For U.S. lawyers, ABA Model Rule 1.5 requires the scope of representation and the basis or rate of fees and expenses to be communicated in writing for new client-lawyer relationships, subject to the rule's limited low-cost exception. A calculator can check math, but the written fee basis controls client expectations.
Everhour Billing & Invoicing uses tracked billable time, project or member rates, and billable expenses to generate invoices while excluding non-billable work. Invoices can be exported to QuickBooks Online, Xero, or FreshBooks, with invoice status, number, issue date, and amount synced back into Everhour.
Everhour supports project rates, member rates, and custom task rates for time-and-materials projects. That lets admins price work according to the client agreement, keep cost rates separate from billable rates, and preserve dated rate changes so older reports keep their original calculations.
Track approved billable time, exclude non-billable tasks, and generate client invoices from the same billing data. Everhour Billing & Invoicing keeps rate math connected to invoice delivery.
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