How to calculate billable hours

Four hours and 30 minutes of billable work is 4.5 billable hours. At $120 an hour, that is $540 before tax. The hours measure the work; the amount is what you charge for it.

To calculate billable hours, add the time your agreement allows you to charge to the client. Exclude breaks and non-billable work, convert minutes to decimal hours, and apply the agreed rate. Keep a record of each step so the client can check the invoice.

First, decide which work belongs on the bill

Client work and billable work are not always the same. A discovery call, travel or a revision may be chargeable under one agreement and excluded under another. Check the scope and terms before choosing the billable status. Internal administration and finding new clients usually belong in your non-billable records.

Work covered by a fixed fee or retainer can still be billable. It does not automatically create an extra hourly charge: check what the fee includes before invoicing additional time.

Clockify's billable-hours guide separates tracking the work from choosing what to charge. That distinction is useful: logging an hour preserves the record, while marking it billable explains how you intend to treat it.

For example, a designer records 6 hours 15 minutes of work. Of that, 1 hour 45 minutes is internal planning and administration. The remaining 4 hours 30 minutes is work covered by the client's hourly agreement.

Logged work

6h 15m

Billable work

4h 30m

At $120/hour

$540

Convert minutes, then calculate the amount

Decimal hours = whole hours + minutes ÷ 60
Billable amount = decimal billable hours × hourly rate

For the designer's work: 4 + 30 ÷ 60 = 4.5 hours, and 4.5 × $120 = $540. A clock reading of 4:30 is not 4.30 decimal hours. That mistake would produce $516, a $24 difference.

Conversion does not authorize rounding up. Six minutes equals 0.1 hour; charging a minimum of six minutes is a separate agreement. Keep the actual time, and apply only the billing policy you agreed. When rates differ, calculate each rate group separately before adding the amounts.

Keep billable, invoiced and paid separate

Billable hours can still be waiting for an invoice. An invoice can still be waiting for payment. Treat those as different stages when you review the business.

The designer's billable share of logged work is 4.5 ÷ 6.25 × 100 = 72%. Capacity utilization answers a different question: how much available working time was billable? Harvest defines utilization using available hours. If the designer had an eight-hour working day available, that measure would be 56.25%. Always name the denominator; missing time records can make a logged-time percentage misleading.

Turn the checked hours into a BillGrid invoice

In BillGrid, log work against the client and project, with a short description and the correct billable status. Open Time > Invoice time, select unbilled hourly entries for one client and currency, and resolve missing rates. Choose Preview invoice, then group the work by project and rate or show one line per entry.

Check the amounts before choosing Create draft. Each entry uses its saved rate; a later change to a project default does not reprice it. Time on an invoice is excluded from the next selection. Follow the illustrated time-to-invoice walkthrough for the complete process.