Free tool
Billable hours calculator
Your billable share, your utilisation, and the effective rate you are actually earning across every hour you work.
Runs entirely in your browser. No account, nothing uploaded, works offline.
In short
To calculate billable hours, total the hours a client pays for and divide by total hours worked. That percentage is your utilisation. Multiply billable hours by your rate for what the period is worth, and divide that by total hours worked for your effective hourly rate, which is what your time really earns once unpaid work is included.
The number most people have never worked out
Almost everyone who bills by the hour knows their rate and knows roughly how many hours they work. Far fewer know what share of those hours anybody paid for, and that ratio decides more about a year than the rate does.
Two people can both work forty-five hour weeks at the same rate and have completely different years, because one spends nine hours a week on proposals, invoicing and unpaid revisions and the other spends twenty-two. The second one is working just as hard and earning substantially less, and without measuring it, neither of them can tell which one they are.
Effective rate is the honest figure
Your advertised rate is what you charge for billable hours. Your effective rate is what you earned divided by every hour you worked, unpaid ones included. It is always lower, and the gap between the two is the real cost of your non-billable work.
Once you can see it, the decision in front of you gets much clearer: it is usually a choice between raising the rate, reducing the unpaid hours, or accepting the number. All three are reasonable. Not knowing which one you are choosing is not.
Guessing the inputs undermines the output
The catch with this calculator, and every calculator like it, is that it is only as good as the two hours figures you typed. Most people underestimate their non-billable time substantially, because admin is made of small pieces that never feel like work sessions.
An automatic time tracker gives you both numbers as a measurement rather than an estimate, including the fifteen minutes of invoice chasing you would never have counted. If you want to check your guess against reality, that is the way to do it.
Questions
How do you calculate billable hours?
Add up the hours spent on work a client pays for, and divide by the total hours you worked to get your billable percentage. Multiply the billable hours by your rate for the amount those hours are worth. Non-billable hours are the difference between the two totals.
What is a good utilisation rate?
It depends entirely on the shape of the business, so treat any single published figure with suspicion. What is useful is your own number tracked over time: a utilisation rate that is falling quarter over quarter tells you something specific, and a snapshot compared to a stranger tells you almost nothing.
What counts as non-billable time?
Typically proposals and pitching, invoicing and chasing payment, admin, internal meetings, marketing, learning, and unpaid revisions. It is real work that no client pays for directly, which is why the ratio matters more than the total.
What is my effective hourly rate?
Your billable earnings divided by every hour you actually worked, including the unpaid ones. It is usually well below your advertised rate, and it is the figure that tells you what your time is really earning.
How do I improve my billable percentage?
Measure it first, because most people are wrong about which category is eating the time. Track everything for a few weeks, look at where the non-billable hours actually sit, and then decide whether the answer is raising your rate, changing your scope terms, or automating the admin.
Does this calculator store my numbers?
No. It runs entirely in your browser, nothing is uploaded, and there is no account. Close the tab and the figures are gone.