What are billable hours?
Billable hours are the hours of work a client pays for. This guide defines them, separates them from non-billable time, shows how to calculate your billable ratio and explains how to track both.
Updated October 20, 2026
The short answer
Billable hours are the hours you spend on work that you charge a client for. If you bill by the hour, they are the quantity on your invoice: hours multiplied by your hourly rate. If you bill a fixed price or a retainer, billable hours are still useful as a measure of how much client work you actually did.
The opposite is non-billable time: work that keeps your business running but is not charged to a client, such as finding new clients, writing proposals, bookkeeping, learning a tool or answering emails that do not relate to a project.
Billable or not? Examples
| Activity | Usually | Why |
|---|---|---|
| Designing a logo for a client | Billable | It is the work the client hired you for. |
| A status call with the client | Billable | It is time spent on their project, at their request. |
| Revisions requested by the client | Billable (unless your agreement says revisions are included) | Depends on what you agreed. Make the agreement explicit. |
| Writing a proposal for a new prospect | Non-billable | It is sales; there is no client yet. |
| Invoicing and bookkeeping | Non-billable | It is administration of your own business. |
| Learning a tool for a specific project | It depends | Some clients accept it, many do not. Decide in advance and tell them. |
| Travel to a client site | It depends | Some agreements bill travel time, usually at a reduced rate. |
Agreement first
Your billable ratio
Nobody bills every hour they work. The billable ratio (also called utilization) shows what share of your working hours you actually charge for:
billable ratio = billable hours ÷ total hours worked × 100
For example, if you worked 40 hours in a week and 28 of them were billed to clients, your billable ratio is 28 ÷ 40 = 70%. The other 12 hours went on sales, administration and learning.
Why the ratio matters
- It shapes your real income. A rate of 80 per hour does not mean you earn 80 for every hour you work. At a 70% ratio you earn about 56 per hour worked.
- It informs pricing. You can only set a sustainable rate if you know how many hours a year you can actually bill. See how to set an hourly rate.
- It reveals leaks. If the ratio drops for several weeks, either work is being given away or non-billable tasks are growing.
There is no single correct number. Many freelancers find that their ratio sits well below 100% because administration and sales are unavoidable, and a figure around two-thirds is not unusual. Yours depends on how you find clients and how you work. The useful thing is to measure it and watch the trend.
Increments and rounding
Clients and agreements often define the smallest unit of time that can be billed.
- Exact time. You bill the minutes you tracked. It is the simplest to explain and the easiest to verify.
- Fixed increments such as 6, 15 or 30 minutes. Each entry is rounded up to the next increment. It is common with consultants, but it must be agreed and disclosed.
- Minimum charge for short tasks, for example a 15-minute minimum per call.
Whatever you choose, write it in your agreement and state it on the report. Rounding that both sides understand is a pricing decision; rounding the client does not know about is a source of mistrust.
How to track billable and non-billable hours
- Record every working hour. You cannot compute a ratio from billable hours alone.
- Attach each entry to a client and a project. That is what makes it billable to someone.
- Give billable work a rate and non-billable work none. An internal project without a rate (for example “Admin” or “Sales”) keeps non-billable time visible without attaching a cost.
- Compare the two per week. A report grouped by project shows how your time splits between client work and everything else.
In Tickario a rate belongs to an entry, a project or a client, each with its own currency. Entries in a project with no rate carry no cost, so they stay in your time totals without inflating your earnings. The dashboard and reports show total time, total cost per currency and a breakdown by project, so the billable and non-billable shares are one chart apart. For the full picture, see billable hours tracking in Tickario.
Frequently asked questions
Are billable hours the same as hours worked?
No. Hours worked is everything you spend on your business; billable hours are the subset charged to clients. The difference is your non-billable time.
Can fixed-price projects have billable hours?
You do not charge by the hour, but tracking the hours still shows whether the fixed price was adequate. Many freelancers call this the effective hourly rate: project price divided by hours spent.
Do billable hours include time between tasks?
Only the time actually spent on the client’s work. If you step away mid-task, subtract the gap. Tools like idle detection help, but the principle is the same: bill what you worked.
What is a good billable ratio?
It depends on your work and how you find clients. Use it as a personal benchmark: measure it for a few weeks, then decide whether to raise your rate, reduce administrative work or both.
This guide is general information, not legal, tax or accounting advice. Rules about what can be billed depend on your contracts and your country.