What Are Billable Hours? How to Track and Bill Them
Billable hours are the hours you can charge a client for — the time spent actually delivering their work, as opposed to admin, marketing, or internal meetings. For anyone who sells their time, billable hours are the number that pays the bills: track them accurately and you get paid for the work you do; track them loosely and you quietly give hours away. This guide covers what counts as billable, how to calculate and track it, how many hours to aim for, and how billable time becomes an invoice.
What are billable hours?
Billable hours are any time you spend on work a client agreed to pay for — designing, developing, consulting, writing, advising — logged against that client and project. The opposite is non-billable time: the work that keeps your business running but that no client pays for directly.
The distinction matters because your income is built on billable hours, but your rate has to cover both. If a third of your week is non-billable, the hours you do bill have to carry that cost — or you're working at a loss without realising it.
Billable vs non-billable hours
| Billable | Non-billable | |
|---|---|---|
| What it is | Client work you charge for | Work you can't charge for |
| Examples | Design, development, consulting, delivery | Admin, invoicing, proposals, internal meetings, learning |
| Shows up as | Lines on an invoice | The real cost of running the business |
Tracking both isn't busywork — non-billable time is how you find out your effective rate, which is almost always lower than your headline hourly rate.
How to calculate billable hours
Calculating billable hours is simple once time is logged as decimals:
- Record each block of work against its client and task.
- Convert minutes to decimals — divide minutes by 60. 15 minutes is 0.25, 30 is 0.5, 45 is 0.75. So 7 hours and 45 minutes is 7.75.
- Add up the billable rows for the period.
- Multiply by your rate — billable hours × hourly rate = the amount to invoice.
For a worked example of logging this, see our timesheet guide.
How to track billable hours
The reliable way to track billable hours is to record them as you work, not from memory at the end of the week — because memory is where billable hours disappear. Two approaches:
- Manual — a spreadsheet or timesheet you fill in per task. Free, but only works if you're disciplined.
- A timer or tool — start a timer when you begin a task, and it logs the hours against the client and rate automatically.
The tool approach captures more, because it doesn't rely on you remembering. Every forgotten 15 minutes is unbilled income.
How many billable hours should you aim for?
Not every working hour is billable, and that's normal. A common benchmark: of a roughly 40-hour week, a freelancer or consultant realistically bills 25–30 hours — the rest goes to admin, sales, and running the business. Over a year, that's around 1,200–1,500 billable hours, not the ~2,000 hours you actually work.
Knowing your real billable ratio — your utilisation — is what lets you price correctly and spot when non-billable work is quietly eating your income.
Turning billable hours into invoices
The point of tracking billable hours is to bill them, accurately and on time. The gap where money leaks is the handoff: hours tracked in one place, invoices built in another, numbers copied by hand.
Heyweek is all-in-one professional services automation (PSA) software that lets freelancers and small teams run their entire business — time, projects, clients, invoicing, and finances — from one connected workspace. Tracked billable hours flow straight into invoices, so the hours you log are the hours you actually charge. For the bigger picture, see what PSA software is or the apps a small business needs.
Frequently asked questions
What are billable hours? Billable hours are the hours you can charge a client for — time spent delivering their work, as opposed to admin, proposals, or internal meetings. They're logged against the client and become the lines on an invoice.
What does "billable" mean? Billable means work a client has agreed to pay for. Non-billable work still has to be done, but no client is charged for it directly.
How do you calculate billable hours? Record each block of work as decimals (15 minutes = 0.25, 45 = 0.75), add up the billable rows for the period, and multiply the total by your hourly rate to get the amount to invoice.
How do you track billable hours? Log time against the client and task as you work — with a timesheet or a timer tool — rather than from memory at the end of the week, which is when billable hours get lost.
How many billable hours are in a year? Though a full-time schedule is roughly 2,000 hours, most freelancers and consultants realistically bill around 1,200–1,500 hours a year, because admin, sales, and running the business aren't billable.