Billable Time

Discover what billable time is, why it matters for professionals and businesses, and how to track it effectively with TMetric.

By Marina Timchenko

Billable Time

What Is Billable Time?

Billable time refers to the hours spent on tasks or projects that can be billed to a client. It’s the work recorded by freelancers, agencies, or employees to ensure accurate invoicing and fair compensation.

Key Points of Billable Time

  • Tracked for freelancers, consultants, agencies, and law firms.
  • Includes client-facing tasks: research, design, development, consulting, support.
  • Excludes internal meetings, training, or unpaid activities.
  • Forms the basis of client invoices and profitability analysis.

Example of Billable Time Calculation

Example: If a lawyer works 40 hours a week, with 30 hours spent on client cases and 10 hours on admin, then:

  • Billable Time = 30 hours
  • Non-Billable Time = 10 hours

This distinction ensures correct billing and project profitability tracking.

How to Track Billable Time in TMetric

1. Create a project and assign billable rates.

Billable Rates

2. Track time with the TMetric timer or log manually.

Time Page

3. Review timesheets to separate billable vs. non-billable hours.

Timesheet Export

4. Export reports or generate invoices directly.

New Invoice

5. Monitor profitability via dashboards.

Projects View

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Benefits of Automated Billable Time Tracking

  • Increases billing accuracy and transparency.
  • Saves time by eliminating manual timesheets.
  • Boosts profitability by revealing time leaks.
  • Helps managers balance workloads.
  • Enhances client trust through precise reporting.

Frequently Asked Questions about Billable Time

What activities are considered billable?

Billable activities are tasks directly related to client work, such as project work, client meetings, research, and client communications. Non-billable tasks include internal meetings, administrative work, and training.

What is non-billable time?

Non-billable time represents the time spent on activities that can’t be charged to a client, such as internal meetings, administrative tasks, training, or company development.

Why is billable time important?

Billable time is essential since:

  • It ensures accurate revenue.
  • It builds client trust.
  • It improves productivity.
  • It supports project management.
  • It prevents lost income.

How do I calculate billable utilization?

Billable utilization is a metric that shows what percentage of an employee’s or team’s available working time is spent on billable tasks. It is calculated by dividing the number of billable hours worked by the total available working hours, then multiplying by 100 to get a percentage.

Billable Utilization (%) = Billable Hours/Total Available Hours × 100

Example: If an employee works 160 hours in a month, and 120 of those are billable, then:

120/160 × 100 = 75%

Does tracking billable time affect payroll?

Yes, tracking billable time can influence payroll, depending on company practices. For freelancers and agencies, it defines how much to invoice clients, while for employees, payroll typically reflects total hours worked. Still, billable time tracking helps employers understand how much of that work contributes to revenue.