Billable vs non-billable hours: what to track

Billable hours are work your client agreed to pay for as a separate time charge. Use non-billable for work with no client charge. Put fixed-fee and fixed-price retainer work in a third category so you can compare its price with the hours you spent.

Keep these categories separate when your work includes all three. Billable hours feed an hourly invoice. Paid-through-price hours show what a fixed fee or fixed-price retainer bought. Non-billable hours show what your rate must cover. If you track only invoice hours, the rest of your working week disappears from the calculation.

This article is for the person who bills their own work and wants to compare revenue with the whole working week.

What counts as billable

An hourly charge can cover delivery work: drafting, client calls, revisions, or research. The same task may be part of a fixed-price project instead. Before work starts, agree with the client on which tasks you will charge separately and which the fixed price includes.

What counts as non-billable

Non-billable hours are real work no client pays for directly:

• Writing proposals and estimates
• Invoicing, bookkeeping, and chasing payments
• Marketing, networking, and portfolio updates
• Discovery calls with leads who never sign
• Learning that no client asked for
• Tool setup and admin

“Non-billable” doesn’t mean optional. It means the client doesn’t pay for that hour. You still spent it.

Sort the gray areas

Decide which hours you plan to show as a separate charge, which are part of a fixed price, and which have no client charge. Keep these categories in your log.

A free discovery call belongs with work that has no client charge. A paid workshop billed by the hour is a separate charge. One sold at a fixed price stays inside that price. Discuss travel, research, and revision charges with the client before the work starts, then label those hours to match.

Track rework separately, whether or not you invoice it. Rework lowers the job’s revenue per hour when it adds time without an added charge. If every hour is billed at the same rate, more billed hours leave that rate unchanged.

What the categories tell you

The billable total feeds an hourly invoice. The paid-through-price total helps you judge a fixed fee or retainer. The non-billable total shows what your rate must cover.

In this example, you invoice 25 hours at $80 for this week’s work. That is $2,000. Then count the 15 hours you spent on proposals, invoicing, and unpaid follow-ups.

You worked 40 hours for a $2,000 invoice. That is $50 in invoiced revenue per working hour, even though your hourly line rate was $80. Collected revenue can be lower if the invoice is not paid.

The $50 is revenue before business costs and personal reserves. Set your client rate to cover those costs and the work you don’t charge for directly. The freelance rate calculator helps you set that target.

Use the totals to decide what you can change:

1. If your rate doesn’t cover the work, consider a higher rate for the next quote.
2. Reduce avoidable unpaid work, such as repeated tool setup, while keeping time for necessary admin.
3. Limit repeated unpaid follow-ups when a lead shows no interest.
4. Follow up on overdue invoices.

If you discount or write off hours, keep those totals separate from the hours you invoiced. An unpaid invoice also makes the amount you receive lower than the amount you billed.

For a solo worker, the question is: how much of my working week did clients buy, and does my rate cover the rest?

Where TimeRetain fits

Use TimeRetain to see how much time a client takes, including the work you don’t charge for. A record of delivery work, revisions, and follow-ups helps you judge the whole job before you quote the next one.

Keep a view of your general admin and marketing too. Those hours explain why an $80 client rate does not mean $80 for every hour you work.

The primary record stays on your device, and you don’t need an account. Optional Sync stores an encrypted copy on TimeRetain’s servers.