Billable time turns approved work into client charges; Everhour keeps those hours tied to project and billing context.
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Billable hours are approved work hours that a client can be charged under the project, engagement letter, contract, or statement of work. The calculation answers a practical billing question: after excluding internal admin, training, rework, sales calls, or other non-billable activity, how much client-facing value did the work produce at the agreed rate?
The result is usually a pre-tax invoice subtotal in U.S. dollars. It is not automatically cash collected, and it is not always the final invoice amount. Discounts, write-downs, retainers, expenses, taxes, and client-specific billing terms can move the final amount away from the raw billable-hours total.
The basic formula is billable hours multiplied by the applicable billable rate. When a project has more than one rate, calculate each line separately, then add the lines together. For example, a client migration includes 29 approved architecture hours at $190 per hour and 16 approved configuration hours at $140 per hour.
The architecture line equals $5,510, and the configuration line equals $2,240. The billable subtotal is $7,750 before taxes, discounts, write-downs, expenses, or collections. If the engagement uses billing increments, round each time entry according to the client agreement before multiplying; rounding only the final monthly total can overstate or understate the invoice.
Billable hours are not the same as billed hours. Billable hours are eligible to charge; billed hours are what actually appears on the invoice after review. A manager can write down 45 billable hours to 42 billed hours, remove a non-billable task, or apply a fixed-fee cap that limits the invoice even when the tracked time is higher.
For U.S. billing, there is no federal VAT/GST or single national sales-tax rate for professional time. Sales tax and similar treatment are state and local, and some services are not taxed. If the service is taxable in the relevant jurisdiction, use the applicable jurisdiction-specific tax input after the billable subtotal is calculated.
A one-off calculation is enough when you have a short list of approved hours, one or two rates, and a single invoice subtotal to check. It also works for quick scenario planning, such as comparing a fixed-fee quote against expected billable time before work starts.
A managed workflow is better when people track time across projects, tasks, rates, approvals, and invoices every week. Everhour embeds tracking controls in supported project tools, syncs project and task metadata, and keeps timesheets and budgets visible inside work tools, so the billing total comes from current work records instead of a rebuilt spreadsheet.
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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Billable time is work that the client agreement allows you to charge, such as consulting, implementation, drafting, development, review, or client meetings. Internal administration, sales work, general training, and correction of avoidable errors are commonly non-billable unless the contract says otherwise. Use the written scope and rate terms as the deciding source.
No. Billable time is eligible for charging, while billed time is the amount placed on the invoice after review. If 52 hours are approved as billable but 5 hours are written down, the invoice shows 47 billed hours. That difference lowers realization even when the underlying work was properly tracked.
Billing increments convert raw time into chargeable time units. A 0.1-hour increment rounds to 6-minute units, while a 0.25-hour increment rounds to 15-minute units. Apply the agreed increment consistently at the entry level when the policy or client agreement requires it, then multiply the rounded time by the rate.
Use the state and local tax treatment that applies to the service and customer location. The United States has no federal VAT/GST or national sales-tax rate. Some states tax certain services, some do not, and local rates can change the combined amount, so a U.S. subtotal needs a jurisdiction-specific tax input when the service is taxable.
Four metrics keep the billing picture clear. Utilization compares billable hours with total worked hours. Realization compares billed value with billable value after write-downs. Collection compares cash received with billed value. Effective billing rate divides billed revenue by the hours behind it, showing what each hour actually produced.
Everhour integrates with tools such as Asana, ClickUp, Jira, GitHub, Monday, Notion, Trello, and others, placing tracking controls inside supported workflows. Project and task metadata sync into Everhour, so billable time stays tied to the same work structure used by the team.
Everhour turns tracked billable time and expenses into invoices, using project, member, or task rates while excluding non-billable work. Invoices can be exported to QuickBooks Online, Xero, or FreshBooks, with invoice status visible back in Everhour.
Track approved hours inside connected work tools, keep project context attached, and move billable time toward invoices with Everhour's integrated billing workflow.
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