How to calculate billable hours

Everhour connects tracked time to billing workflows, so client work turns into cleaner totals, budgets, and invoices.

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Employee Time Card
DayTime InBreak Start
Break End
Break
Time OutTotal
Total hours0:00
Regular0:00
Overtime0:00
Double OT0:00
Total hours0:00
Regular0:00
Overtime0:00
Double OT0:00
Total gross pay
Regular pay
Overtime pay
Double OT pay
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Date
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Date

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Acme Web Project
1
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Your Company LLChello@yourcompany.com
INVOICE
Invoice #1042
Group by:
DescriptionHoursRateAmount
Website Redesign14h$150/h$2,100.00
Brand Guidelines7h$150/h$1,050.00
Marketing Strategy3.5h$150/h$525.00
Total Due$3,675.00
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Turning work time into billable totals

Start with the billing outcome

The job is to turn worked time into a client-ready billable total. You need the hours tied to a client, project, task, and rate, then filtered so internal work does not land on the invoice. A clean total separates time actually billed from time actually spent on admin, sales, corrections, or other non-billable work.

Covered employers also need payroll records that satisfy wage-and-hour rules when workers are employees. The FLSA requires covered employers to keep accurate records for non-exempt workers, including hours worked each workday and total hours worked each workweek. That recordkeeping duty is separate from client billing, but the same time data often supports both reviews.

Separate billable and internal work

Billable hours belong to client-approved work: project tasks, service delivery, support covered by an agreement, or other work the client expects to pay for. Non-billable hours include internal meetings, business development, training, general admin, and rework that the client contract excludes. The decisive step is classification before totaling, because a single mixed bucket creates invoice disputes.

A practical record includes the person, client, project, task, date, start and stop time or duration, billing status, comments, and rate. U.S. billing examples normally use U.S. dollars. For employee time, keep payroll and billing uses separate: covered nonexempt employees still need wage records even when only part of their day is billable to a client.

Check the weekly and rate edge cases

Billable totals do not replace wage calculations. Under the FLSA, unless exempt, covered employees must receive overtime pay for hours worked over 40 in a fixed 168-hour workweek at not less than one and one-half times the regular rate of pay. Hours cannot be averaged across two or more workweeks for FLSA overtime purposes.

Weekend or holiday work does not create a federal premium by itself under the FLSA. A premium applies when the weekly overtime rule is triggered or another law, policy, contract, or agreement requires it. For billing, the client contract controls whether weekend work uses a different billable rate, so record the timing clearly before applying any invoice line.

Move from totals to managed billing

A one-off total is enough for a short job, a single client, or a quick check before sending an invoice. It stops being enough when several people track the same client, budgets reset by period, rates vary by project or person, or managers need an approval trail before billing.

Everhour Project Budgeting gives teams time and money budgets, recurring budget periods, budget alerts, budget protection, expense inclusion controls, multiple billing methods, and client-level budgets. That turns billable-hour calculation into a managed workflow: tracked time updates the budget while the team still reviews what becomes billable.

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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Frequently Asked Questions

How do you separate billable from non-billable hours?

Classify each time entry by the client agreement before you total it. Client delivery, approved project tasks, and contracted support usually count as billable. Internal admin, sales work, general training, and excluded rework stay non-billable unless the agreement says otherwise. The billing status should be attached to the entry, not added from memory at the end.

Which fields make a billable-hour record complete?

A usable record identifies the person, date, client, project, task, duration or start and stop time, billing status, comments, and rate. Employee records may also need to support payroll review. For employees covered by the FLSA minimum wage or overtime provisions, employer records must include daily hours worked and total hours worked each workweek.

Can billable hours and hours worked be different?

Yes. Hours worked measure time spent working, while billable hours measure the portion charged to a client. An employee can work a full day with only part of that time billable. Payroll, overtime, and recordkeeping reviews use hours worked; invoices use billable hours under the client agreement.

Does overtime automatically increase the client bill?

No. FLSA overtime rules govern pay for covered nonexempt employees, not the client's billing rate by default. A higher invoice rate for overtime, weekend work, or holiday work comes from the contract, policy, or agreement with the client. Keep the workweek totals accurate for payroll and apply billing premiums only when the billing terms require them.

How long should billable-hour support records be kept?

For FLSA-covered employment records, employers must preserve payroll records for at least three years and basic time and earnings records, such as daily start and stop time cards or sheets, for at least two years. Client billing records may need longer retention under contracts, accounting policy, or tax documentation rules.

How does Everhour Project Budgeting support billable-hour calculation?

Everhour Project Budgeting tracks time and money budgets as people log time, then supports recurring budget periods, client-level budgets, and billing methods such as fixed-fee or time-and-materials. Budget alerts at defined thresholds help managers catch overruns before tracked billable time exceeds the approved client limit.

How does Everhour keep billable records ready for review?

Everhour Timesheets collect weekly project hours and working hours by person so managers can review time before billing or payroll. Submitted and approved time is protected from edits, and managers can approve, reject, or partially approve entries when corrections are needed.

Turn hours into billable work

Track approved hours against clients, projects, rates, and budgets. Everhour connects time entries to budget alerts and billing methods, giving teams a clearer path from work performed to billable revenue.

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