Billable time depends on client-approved work, rates, and exclusions; Everhour keeps those details reportable after calculation.
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This calculation answers which recorded hours should become client-facing value. Billable hours usually include approved work performed for the client: analysis, drafting, meetings, implementation, review, support, or other agreed services. The total excludes internal administration, training, sales work, rework written off by policy, and any task marked non-billable under the project agreement.
The practical output is not just an hour count. You need the billable hours, the rate attached to each work type or person, the resulting billable amount, and any later adjustment. That distinction matters because 50 worked hours can become 42 billable hours, 39 invoiced hours after a write-down, and a smaller collected amount after discounts or unpaid balances.
Worked time is every hour spent by the person or team. Billable time is the subset approved for client charging. The difference often comes from internal meetings, project management overhead, onboarding, corrections, or tasks the contract says are included in a fixed fee. Do not price every timesheet row unless the row has a billable status, a client or matter, and an applicable rate.
A common mistake is treating "client-related" as the same as "billable." Preparing an internal staffing plan for a client project may support the engagement, but it is not automatically billable. A status call requested by the client is usually different from an internal resourcing meeting. The source of the request, the fee agreement, and the task label decide whether the hour belongs in the billable total.
The core formula is billable hours × billable rate, calculated by category when rates differ. For example, a consulting engagement has 29 approved research hours at $155 per hour and 12 approved implementation hours at $120 per hour. The research line is $4,495, the implementation line is $1,440, and the pre-tax billable value is $5,935.
Billing increments can change the hour count before pricing. If the agreement rounds to 0.1 hour, a 16-minute task becomes 0.3 hour; if it rounds to 15-minute increments, the same task becomes 0.25 hour. Apply the rounding rule before multiplying by the rate, and keep the unrounded time available for audit, utilization, or realization analysis.
A one-off calculation is enough when you have a short list of approved entries, one rate, and no disputed time. It is also enough for a quick estimate before invoice review. The moment multiple people, rates, task exclusions, write-downs, or client-specific rules enter the process, a spreadsheet total becomes easy to misread.
A managed workflow gives you a durable record: time capture, billable and non-billable labels, approval, reporting, and invoicing handoff. Everhour Reporting can show billable time, non-billable time, billable amount, and cost by member, task, project, or client, so the review explains what counted instead of only showing the final number.
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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Include hours that were performed for the client and approved under the contract, statement of work, engagement letter, or billing policy. Common examples are client meetings, research, drafting, implementation, testing, review, support, and matter-specific project work. Exclude internal administration, sales time, general training, and any task the agreement or project setup marks as non-billable.
Internal admin time is not automatically billable, even when it relates to a client. Scheduling, staffing, internal status meetings, invoice preparation, and general file organization usually stay non-billable unless the written agreement says otherwise. The safest calculation separates those entries first, then prices only the approved client-chargeable work.
Billing increments convert raw time into chargeable units before the rate is applied. With 0.1-hour billing, 6 minutes equals 0.1 hour and 18 minutes equals 0.3 hour. With 15-minute billing, the same 18 minutes becomes 0.25 hour if rounded to the nearest increment. Use the client-approved rounding rule consistently.
No. In a U.S. billable-hours calculation, tax does not decide which hours count as billable. Tax is a separate invoice question. The United States has no federal VAT/GST or national sales-tax rate for billed professional time; state and local rules decide whether a taxable service needs a jurisdiction-specific tax input.
Worked time is total labor performed. Billable time is the approved subset chargeable to the client. Invoiced time is the portion actually placed on an invoice after write-downs or exclusions. Collected time is the value ultimately paid. Keeping the four metrics separate shows utilization, realization, collection, and effective billing rate without mixing operational and cash results.
Everhour Reporting lets admins build reports with columns for billable time, non-billable time, billable amount, and cost, then group or filter by project, task, client, or member. That makes billing review specific: each total can be traced back to the entries and categories that produced it.
Everhour Billing & Invoicing converts tracked billable time and expenses into invoices, calculates amounts from rates while excluding non-billable work, and marks invoiced time so the same entries do not appear again in future invoices.
Turn approved entries into grouped, filtered reports with billable time, non-billable time, billable amount, and cost, so every billing review starts from Everhour Reporting.
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