How to track non billable time

Everhour tracks project time by task and client, giving non-billable work a clear place in reports.

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Everhour — Time Tracking
Time Entries
01:24:00
00:31:00
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Everhour — Budgeting
Acme Web Project
1
50% of budget used
$2,500.00of $5,000.00
$2,500.00 remaining
75%
Actual costRemaining cost

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Everhour — Invoices
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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Non-billable work records

Set a clear tracking purpose

Track non-billable time so you can separate client work from internal work before billing, payroll review, and project analysis. The goal is a usable weekly record: who worked, which project or internal category received the time, whether the time is billable, and which notes explain the work. A clean setup prevents admin, sales, training, and rework from disappearing inside client totals.

A practical weekly view includes billable client tasks, non-billable project tasks, and general internal categories. For example, a designer can record 5 hours on client production, 1 hour on client-related revisions marked non-billable, and 2 hours on internal planning. That split keeps the invoice defensible while still showing the true cost of serving the account.

Use categories that explain decisions

Non-billable categories should answer a management question, not describe every tiny activity. Common categories include internal meetings, proposals, training, administrative work, rework, client support included in a retainer, and project management that the contract excludes from billing. Keep the list short enough that people choose the right option during the week without guessing.

Project-related non-billable time deserves its own label because it affects profitability. A task marked non-billable under a client project shows cost without adding invoice value. Internal company work belongs in separate internal projects or categories. That distinction lets you compare client margin, staffing load, and internal overhead without mixing unrelated time into one bucket.

Keep billing and payroll separate

Billable status does not decide whether hours count as hours worked. Covered employers under the FLSA must keep accurate records for non-exempt workers, including hours worked each workday and total hours worked each workweek. A non-billable client call, internal training session, or required admin block can still be work time for wage-and-hour records.

Covered non-exempt 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, unless an exemption applies. The FLSA does not require a specific timekeeping form, but the method must be complete and accurate. Billing labels should never erase work that belongs in payroll records.

Move from totals to workflow

A free weekly tracker is enough when you need a fast split between billable and non-billable hours for one person, one project, or a simple invoice review. It works best when the categories are already known and the result does not need approvals, locked periods, budget alerts, or handoff to accounting, payroll, or a client reporting process.

A managed workflow becomes necessary when multiple people track across projects and clients. Everhour Time Tracking supports timers and manual entries, captures time against tasks and projects, and feeds timesheets, reporting, budgeting, invoicing, and payroll review. Admins can use approvals, locked periods, reminders, and timer rules to keep non-billable records consistent after the week closes.

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

Which non-billable categories should a team start with?

Start with internal meetings, administration, training, sales or proposals, non-billable client support, and rework. Add project-specific categories only when they change a decision, such as margin review or staffing allocation. Too many categories create inconsistent entries, while too few hide the work that explains overhead and project cost.

Does non-billable time belong in payroll records?

Yes, when the time is hours worked by an employee. Billable status controls client charges, not wage-and-hour treatment. For employees covered by FLSA minimum wage or overtime provisions, employer records must include daily hours worked and total hours worked each workweek, regardless of whether a client receives an invoice for those hours.

Should paid time off be marked as non-billable time?

Paid time off should stay separate from non-billable work time. PTO explains paid time not worked, while non-billable time usually describes work that does not get charged to a client. Keeping those labels separate protects utilization reports, project cost analysis, and payroll review from treating absence and internal work as the same event.

Can non-billable work create overtime obligations?

Yes, covered non-exempt employees can reach overtime through a mix of billable and non-billable work. Under the federal baseline, covered non-exempt employees must receive overtime pay for hours worked over 40 in a workweek at at least 1.5 times the regular rate. State law, policy, or contract terms can add stricter rules.

How do you track internal work without over-monitoring people?

Track the category, project, task, duration, and useful notes instead of collecting unnecessary personal detail. U.S. businesses handling personal information must avoid unfair or deceptive practices under Section 5 of the FTC Act, and FTC guidance says companies should collect only what they need, protect it, and dispose of it securely.

How does Everhour Time Tracking handle non-billable project work?

Everhour Time Tracking lets people record time with live timers or manual entries against tasks and projects, then mark work in a way that feeds timesheets, reports, budgets, invoices, and payroll review. Admin controls such as approvals, locked periods, reminders, and timer rules help keep records usable after submission.

Track non-billable work consistently

Move recurring non-billable tracking into Everhour so task time, project totals, approvals, and billing review stay connected across the team.

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