China legal invoices use RMB and VAT; Everhour keeps billable and non-billable time separated before billing.
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A legal billing total answers one practical question: how much approved time should be charged to the client for a matter in China. The core inputs are billable hours, the agreed hourly rate for each person or task, any non-billable exclusions, and the VAT treatment that applies to the invoice. China's legal tender is the renminbi, with the yuan as the unit used for billing totals.
The result should separate time value from tax. For domestic professional time billed by a general VAT taxpayer, China applies VAT at 6% to the VAT-exclusive sales amount unless a statutory exclusion or different category applies. Eligible small-scale taxpayers use a 3% simplified VAT collection rate when annual taxable VAT sales do not exceed RMB 5 million.
Calculate the time charge first: approved billable hours multiplied by the agreed RMB hourly rate. For example, a legal matter has 26 approved partner hours at RMB 1,500 per hour and 18 approved associate hours at RMB 900 per hour. The partner charge is RMB 39,000, the associate charge is RMB 16,200, and the VAT-exclusive service amount is RMB 55,200.
For a general VAT taxpayer using the 6% service VAT rate, output VAT is the sales amount multiplied by the VAT rate. RMB 55,200 × 6% equals RMB 3,312, so the invoice total is RMB 58,512 before any contract discount, write-off, expense reimbursement, or collection issue. If the taxpayer is eligible for the 3% simplified rate, the VAT line changes; the approved time value does not.
China does not set one national billable-hour increment for lawyers. National lawyer-fee guidance says lawyer service fee items, billing methods, and fee standards are in principle set by the law firm and filed annually with the local lawyers association. That makes the engagement letter important: it should define hourly rates, rounding, non-billable work, expenses, VAT handling, and invoice timing.
Payment timing is also contract-driven. PRC law does not set a general statutory payment term. If the performance period is unclear and cannot be determined from the contract or course of dealing, the debtor may perform at any time and the creditor may request performance at any time after allowing necessary preparation time. A billing calculation is cleaner when the contract states due dates directly.
A one-off calculation is enough when you have a short matter, fixed hourly rates, clear approved hours, and one VAT treatment. It gives you a fast check before issuing a VAT invoice, comparing a draft invoice, or explaining a fee estimate to a client. It is not a substitute for the engagement terms, tax classification, or internal approval policy.
A managed workflow matters when several lawyers, tasks, or rate types feed the same matter. 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. That structure keeps excluded work out of the client total before invoicing.
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 applicable RMB hourly rate for each lawyer, task, or matter category. Add the line amounts to get the VAT-exclusive service amount. Then apply the correct VAT treatment separately. For a general VAT taxpayer billing domestic professional services, the usual service VAT rate is 6% unless a statutory exclusion or different category applies.
China uses VAT rather than GST or retail sales tax for billed professional services. 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. Taxpayers must issue and use VAT invoices lawfully.
The 3% simplified VAT collection rate applies to eligible small-scale taxpayers. The facts that change the calculation are taxpayer status and annual taxable VAT sales: a small-scale taxpayer is one whose annual taxable VAT sales do not exceed RMB 5 million. Do not use 3% only because the client is small or the invoice amount is low.
No national billable-hour increment controls every lawyer invoice in China. National lawyer-fee guidance says lawyer service fee items, billing methods, and fee standards are in principle set by the law firm and filed annually with the local lawyers association. The engagement letter should state whether time is billed by exact time, 0.1 hour, 15 minutes, or another increment.
The common mistake is mixing VAT-inclusive and VAT-exclusive amounts. China's output VAT formula is sales amount × VAT rate, and the sales amount is VAT-exclusive. If you multiply hours by rates that already include VAT, then add VAT again, the client total is overstated. Keep the service amount, VAT line, and invoice total separate.
Everhour supports billable and non-billable time by project billing status, task-level non-billable controls, custom task rates, and member-rate exceptions. Admin reports can show billable time, non-billable time, billable amount, and cost, so excluded legal work stays visible internally without entering the client charge.
Use Everhour to separate billable legal work from internal time before invoice review. Project billing status, task exclusions, and custom rates give teams cleaner billable totals and less manual cleanup.
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