Billable vs non-billable hours: what to track

Billable hours are work your client agreed to pay for as a separate time charge. Non-billable hours are work with no client charge. Fixed-fee and fixed-price retainer work is paid through the agreed price, but it is not a separate hourly invoice line.

You need all three categories. 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 the first number, you cannot check your rate.

Firm articles talk about utilization targets and manager dashboards. This article is for the person who bills their own work and needs all three categories.

What counts as billable

An hour is billable when your agreement charges the client for it. Usually that means delivery work. Examples: the draft the client bought, a call the contract covers, a revision inside the agreed scope, or research the deliverable needs.

The contract sets the boundary, not how productive the hour felt. A productive hour on a proposal that nobody signed is still non-billable.

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” does not mean optional. It means the client does not pay for that hour. You still spent it.

Hours	On the invoice?
Hourly client work a signed agreement covers	Yes
Proposals, admin, marketing, unpaid follow-ups	No
Fixed-fee or fixed-price retainer delivery	Paid through the agreed price, not a new hourly line
Travel, learning a tool, rework from your mistake	Only if the agreement says so

The contract decides

Does a signed agreement cover this hour?

If the answer is no, the hour is not billable. Estimates, proposals, and unpaid discovery calls are sales work: no contract exists yet.

A paid discovery workshop is different. It has its own agreement, so those hours are billable.

If the answer is yes, use the contract type next. On an hourly contract, drafting the deliverable bills by the hour. On a fixed-fee project or fixed-price retainer, that same drafting is paid through the agreed price, not a separate invoice line. Track it as paid-through-price work.

A revision round follows the same rule. A change outside the agreed scope is not billable until you agree a new price.

Once a project closes, read the contract before you call a follow-up a favor. Some agreements still cover a support window or a correction period.

Inside that window, do not charge again. Outside it, a “quick question” is a favor or a small new job. You choose.

Three cases the contract does not settle

Some hours are covered on paper and still get written off in practice.

Redoing your own mistakes. An hourly contract technically pays for the hour you spend fixing something you got wrong. Most freelancers do not bill it, and clients who spot it on an invoice remember. Write it off, but keep the time.

Rework you never charged for is still an hour of your week. This is different from a revision the client asked for, which is billable inside the agreed scope.

Getting up to speed. Research the deliverable needs is billable when the agreement covers the work. Learning a tool, a method, or an industry you did not know yet is usually non-billable unless the agreement covers it. Agree on it before you start, or put it in your rate.

Travel. Nothing here is standard. Half rate, a flat fee per trip, full rate when you work in transit, and folding travel into a project fee are all common.

Ordinary commuting is not a client hour. A trip to a client site is billable only if the agreement says so. Put the rule in writing before the first trip.

Why you need all three categories

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.

An example: you invoice 25 hours at $80 this week. 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. The billed rate was $50 per working hour, not $80. If the client pays the full invoice, your collected rate is also $50. If your costs assume $80 for each working hour, your rate is too low.

That $50 is still gross. Tax, unpaid leave, and business costs still come out of it.

Price against that leftover, not against the $80 on the invoice. The freelance rate calculator turns those inputs into a target rate.

There are four ways to close the gap:

1. Charge more.
2. Do less unpaid work.
3. Stop chasing leads that never convert.
4. Collect what you already billed.

That last one is the quiet leak. You worked the hours, then discounted them, wrote them off, or never got paid. Those hours are not in your non-billable total, so they also miss your rate math. Firms call this realization. Know the number.

Ignore the firm math on utilization. A 70% target is built for a company where someone else does the selling and the invoicing. Solo weeks often sit around half to two-thirds billable, and the example above is 62.5%.

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

Where TimeRetain fits

Give each client a timeline in TimeRetain. Tag the kind of work, then start a timer on your device and stop when the block ends.

Put a rate on the client timeline for hourly work. Leave unpaid admin, proposals, and marketing on an Internal timeline with no rate, or a $0 rate. Those hours stay in your week total and off the invoice.

When you invoice, filter the period and the client, then export CSV into the invoices you already send. The record stays on your device, with no account.