Invoice totals start with approved billable time, and Everhour keeps rates, dates, and billing details connected.
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An invoice-hours calculation answers a practical billing question: how much should the client be charged for approved work in a defined period? The core input is billable time, not every hour worked. Internal meetings, training, rework excluded by policy, or tasks marked non-billable stay out of the invoice total unless the client agreement says otherwise.
The result usually includes billable hours by rate, adjustments such as write-downs, reimbursable expenses if they are part of the invoice, and any jurisdiction-specific tax input. In the United States, billable-hour totals are normally stated in U.S. dollars. There is no federal VAT/GST or national sales-tax rate for billed professional time; sales tax treatment is state and local.
Start with each approved billable hour group, multiply by its billing rate, then add the groups. If the invoice uses one rate, the formula is billable hours × hourly rate. If it uses several roles or tasks, calculate each line separately before adding them. Apply write-downs after the standard billable value so the discount is visible.
For example, a client implementation invoice includes 18 approved design hours at $125 per hour and 22 approved deployment hours at $175 per hour. The standard billable value is $2,250 plus $3,850, or $6,100. A $300 write-down makes the pre-tax invoice subtotal $5,800. If the taxable service is billed in a Texas location with an 8.25% combined rate, tax adds $478.50, making the total $6,278.50.
The most common mistake is treating all invoice components as one hourly number. Billable labor, non-billable work, expenses, discounts, and taxes answer different questions. A clean invoice-hour calculation keeps the labor subtotal separate from tax and reimbursable costs, because the hourly rate measures work value while tax and expense lines follow different rules.
This separation matters in U.S. billing because there is no single national sales-tax input. Some services are not taxed, and taxable services use state and local treatment. Hawaii uses general excise tax for business activities, New Mexico gross receipts tax can include services performed in New Mexico, and Texas taxes taxable services at 6.25% state with local additions up to 8.25% combined.
A one-time calculator is enough when you have a short list of approved hours, one or two rates, and a clear decision on tax treatment. It gives a fast check before sending a simple invoice or reviewing a client total. A quick calculation also catches obvious errors, such as billing non-billable work or applying a blended rate where task rates are required.
A managed workflow is better when invoices come from ongoing time records, multiple people, per-project overrides, dated rate changes, approvals, and repeated billing cycles. Everhour can keep cost rates separate from client-facing billable rates, apply default member rates or project overrides, and preserve dated rate history so older invoice periods keep their original pricing.
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 for the invoice period, group them by the rate that applies, and multiply each group by its hourly rate. Then add the line totals. Apply write-downs, discounts, expenses, and taxes as separate invoice components instead of blending them into the hourly calculation.
Non-billable time should not increase the invoice amount. You can keep it in internal reports to measure total effort, utilization, or project profitability, but invoice hours should reflect work the client agreement allows you to charge. Mixing non-billable time into the invoice total overstates the client charge.
U.S. sales taxes fit after the labor subtotal when the billed service is taxable in the relevant state or local jurisdiction. The United States has no federal VAT/GST and no national sales-tax rate. Use the applicable state and local rule for the service, location, and customer.
Worked hours are all hours spent on the job. Invoice hours are the subset approved for client billing. A team can work 50 hours and invoice 40 hours if 10 hours are internal, out of scope, written down, or marked non-billable under the client agreement.
Payment terms matter after the invoice amount is set. 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. Private client payment timing comes from the contract or invoice terms.
Everhour separates internal cost rates from client-facing billable rates and supports default per-person rates, per-project overrides, and project, member, or custom task rates. Dated rate history keeps older invoice periods priced under the rates that applied when the work was done.
Everhour Billing & Invoicing turns tracked billable time and expenses into invoices, calculates amounts from rates and billable time, and excludes non-billable work. Invoice data can be grouped by project, task, person, date, or another available breakdown before export.
Use dated rates, project overrides, and billable-time records before invoices are created. Everhour keeps pricing history tied to tracked work for cleaner client billing.
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