Billable Hours Calculator

How it is calculated

The tool takes three numbers for one period: total hours worked, hours billed to clients, and your hourly rate in dollars. It returns revenue = billable_hours × hourly_rate, utilization = billable_hours ÷ worked_hours × 100 and non-billable = worked_hours − billable_hours, shown to one decimal. Worked hours must be above zero, while billable hours and the rate may be zero. Billable hours larger than worked hours are impossible, so that input gives no result, as do negative values. All figures must cover the same period, such as one month, and the rate is one flat rate for every billed hour. Invoice discounts and unpaid invoices are not part of the revenue.

Common mistakes

• Entering billable hours that are larger than worked hours, for example by counting travel time in the billable field only. The tool shows no result; fix the worked-hours figure so it includes every hour.
• Mixing periods, such as 160 worked hours for a month with billable hours from a single week. Use one period for all three inputs.
• Entering only the hours at the desk as worked hours. Utilization is measured against total hours worked, so admin, meetings and business development time belong in worked hours.
• Treating the revenue as income. It is billable hours times the rate, before discounts, write-offs, unpaid invoices and costs.
• Using a different rate for different clients and averaging by hand. The tool applies one rate to all billable hours, so enter a weighted average rate.