How to Calculate Billable Hours for Invoices
As a freelancer, consultant, or contractor, "Time is Money" is literally true. Accuracy is the key to getting paid and maintaining trust with clients. This tool helps you convert your daily work logs into a final invoice amount without complex spreadsheets.
1. What counts as "Billable Hours"?
Billable hours are the time you spend actively working on a client's project. This typically includes:
- Active development, design, or writing time.
- Client meetings and phone calls.
- Research specifically for the project.
It usually excludes your administrative tasks like invoicing, marketing your own business, or eating lunch (unless specified in your contract).
2. Converting Time for Invoices
Clients expect invoices in decimal format. You cannot bill for "3 hours and 20 minutes." You must bill for 3.33 hours.
Rounding Tip:
Most freelancers round their time to the nearest 15 minutes (0.25 hours).
Example: If you work 1 hour 10 minutes, round up to 1.25 hours on your invoice.
Frequently Asked Questions (FAQ)
1. How do I calculate billable hours?
Track your start and end time for a client project. Subtract any non-work breaks. The remaining time is your 'Billable Hours' which goes on your invoice.
2. How do I calculate my invoice total?
Multiply your Total Billable Hours by your Hourly Rate. For example, 10.5 hours x $50/hr = $525.00 Invoice Total.
3. Should I round my hours for invoices?
Most freelancers round to the nearest 15 minutes (0.25 hours). This calculator provides exact decimal hours, which you can round up or down based on your client agreement.