FREELANCE BUSINESS GUIDE
What Are Billable Hours for Freelancers?
Billable hours are the hours you can directly charge to a client. Understanding the difference between billable and non-billable time is important when setting freelance rates.
Examples of billable work
Depending on your agreement, billable work might include design, development, writing, consulting, research, client meetings or other tasks directly connected to delivering the client's project.
Examples of non-billable work
Marketing your services, preparing proposals, bookkeeping, updating your portfolio, professional development and general administration are often non-billable.
Why this matters for your hourly rate
If you work 40 hours per week, that does not necessarily mean you can invoice clients for 40 hours. If only 24 hours are billable, those 24 hours must generate enough revenue to support the entire business.
Billable utilization
Billable utilization is the percentage of your available working time that is actually billable to clients.
Example
If you work 40 hours in a week and bill clients for 24 hours, your billable utilization is 60%.
Higher utilization is not always better
Trying to bill every working hour can leave no time for sales, administration or improving your business. The goal is to use a realistic estimate when planning your rates.
Use billable hours when calculating your rate
Your minimum freelance rate should generally be based on the hours you realistically expect to bill, not every hour that you are available for work.
See how billable time changes your rate
Our hourly rate calculator lets you change your billable percentage and instantly see how it affects the rate your business needs.
Open Hourly Rate Calculator