Everhour supports hourly billing workflows with budgets and billable time controls, while the calculation still starts with approved hours and rates.
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
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An hourly billing calculation answers how much a client owes for approved billable work before payment status is considered. The core inputs are billable hours, the hourly rate, the billing increment, write-downs or adjustments, and any jurisdiction-specific tax input when the service is taxable. In the United States, totals are normally stated in U.S. dollars.
The result matters before you send an invoice, review a retainer balance, or compare expected revenue against actual work. It also separates billed client value from total worked time. Internal calls, admin work, corrections, and non-billable tasks can belong in your records without increasing the amount charged to the client.
Start with the billing agreement. Define which tasks are billable, which rate applies, and how time is rounded. Common increments include 0.1 hour for six-minute billing and 0.25 hour for fifteen-minute billing. Rounding should be applied consistently to time entries before multiplying by the rate, not adjusted casually at the invoice total.
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. For other hourly service businesses, the same discipline prevents disputes: the client should see the rate, billable scope, billing period, and payment terms before work begins.
The basic formula is billable hours × hourly rate = billable amount. For mixed work, calculate each rate group separately, then add the subtotals. For example, 42 approved implementation hours at $135 per hour equal $5,670, and 16 approved review hours at $95 per hour equal $1,520. The pre-tax invoice value is $7,190.
U.S. tax treatment is state and local, not a single federal VAT/GST or national sales-tax rate. Some services are not taxed; taxable services need the correct jurisdiction-specific input. For example, New Mexico gross receipts tax includes performing services in New Mexico, with combined rates from 5.125% to 8.6875% by business location.
A one-off calculation is enough when you have a small, clean invoice: one client, one rate, approved time, no retainer drawdown, and no need to compare the work against a budget. A spreadsheet or calculator can confirm the amount before you send the bill.
A managed workflow is better when hourly billing repeats. You need durable time capture, billable and non-billable flags, approvals, project budgets, and an invoicing handoff. Everhour Project Budgeting supports time and money budgets, recurring budget periods, alert thresholds, budget protection, expense inclusion controls, and multiple billing methods for ongoing client work.
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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The basic formula is approved billable hours multiplied by the agreed hourly rate. If multiple rates apply, calculate each rate category separately and add the subtotals. Apply rounding according to the billing agreement before the multiplication step, then add jurisdiction-specific taxes only when the service is taxable.
Round each time entry according to the agreed billing increment before totaling the invoice, unless the contract states a different method. Rounding only the final monthly total changes the result when many small entries are involved. Use the same increment for the whole billing period so the invoice is consistent and auditable.
Non-billable work should stay out of the amount charged to the client, but it can remain in internal records. Keeping it visible helps you compare total effort with billed value. The client-facing invoice should show billable work, rates, and adjustments clearly enough to support the final amount.
No. 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 rates vary by jurisdiction and service type. Use a jurisdiction-specific tax input only when the billed service is taxable.
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. For invoices paid less than 31 days late, Treasury uses simple daily interest with principal, annual rate, and days late.
Everhour Project Budgeting tracks time and money budgets as work is logged, with recurring periods for ongoing retainers and budget alerts at 75%, 90%, and 100% or custom thresholds. Budget protection can stop timers and prevent extra logging after a budget is exceeded.
Everhour Billing & Invoicing converts tracked billable time and expenses into invoices using project or member 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.
Set budgets before work starts and track approved billable time against them. Everhour gives teams budget alerts, recurring budget periods, and billing controls for cleaner hourly invoicing.
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