How to Calculate Billable Hours
Track time, convert it to decimal, account for non-billable work, and set a rate that adds up.
Quick answer
To calculate billable hours: record each session's start and end time, subtract breaks and non-billable time, convert to decimal hours (minutes ÷ 60), then multiply the total by your rate. For the time math on a single session, use the work hours calculator.
Step by step
1. Track each work session
Note the start and end time of focused client work. Whether you use a timer or write it down, the goal is an honest record of time spent on billable tasks — not an estimate at the end of the week.
2. Subtract breaks and non-billable time
Remove lunch, interruptions, and anything not chargeable to the client. A 9:00–5:00 day with a 30-minute lunch is 7.5 hours present — but if 1.5 of those went to admin and email, only 6 are billable.
3. Convert to decimal hours
Invoices use decimal hours, not hours and minutes. Divide minutes by 60: 15 min = 0.25, 30 min = 0.5, 45 min = 0.75. So 6 hours 45 minutes billable = 6.75 hours.
4. Multiply by your rate
Total decimal hours × hourly rate = the invoice amount. The work hours calculator does steps 1–4 for a single session, including optional pay.
Billable vs non-billable: utilization
A full-time year is about 2,080 hours, but almost nobody bills all of it. The share you actually bill is your utilization rate. If you bill 70% of a 2,080-hour year, that is roughly 1,456 billable hours.
This matters for pricing: to earn a target income, divide it by your billablehours, not your total hours. Pricing against 2,080 when you only bill 1,456 leaves you about 30% short.
Worked example
| Office hours (9:00–5:00, −30 min lunch) | 7.5 h |
| Non-billable (email, admin, invoicing) | −1.5 h |
| Billable today | 6.0 h |
| At $90/hour | $540 |
Common mistakes
- Estimating at week's end instead of tracking live — almost always overstates billable time.
- Billing in hours and minutes instead of decimal, causing invoice math errors.
- Setting rates against 2,080 hours while ignoring a realistic utilization rate.
- Forgetting to subtract breaks and context-switching time.
Frequently asked questions
How do I calculate billable hours?
Record the start and end time of each work session, subtract any non-billable time and breaks, then convert the result to decimal hours (minutes ÷ 60). Sum the decimal hours and multiply by your rate. For a single session, the work hours calculator does the time math for you.
What is the difference between billable and non-billable hours?
Billable hours are time a client pays for — work directly on their project. Non-billable hours are real work that is not charged to a client, such as admin, marketing, invoicing, and professional development. Both are part of your day; only billable hours generate revenue.
How many billable hours are in a work year?
A full-time schedule is about 2,080 hours per year, but few people bill all of it. After non-billable work, most professionals bill 60–80% of their time — roughly 1,250–1,650 hours per year. Use a realistic utilization rate when setting prices.
How do I convert minutes to billable decimal hours?
Divide minutes by 60. So 15 minutes = 0.25, 30 minutes = 0.5, and 45 minutes = 0.75. Most billing systems and invoices use decimal hours rather than hours and minutes.