Billable hours
Hours worked that can be charged to a client, as opposed to internal or non-billable time. Tracked to protect margin and inform pricing.
For example, a developer's eight-hour day might include six hours building a client feature (billable) and two hours on a team standup and internal tooling (non-billable). Only those six hours appear on the client's invoice or count against their retainer.
Why it matters to agencies: billable hours are the raw material your agency sells. Tracking them accurately protects your margin, exposes work that is quietly being given away, and gives you the real data you need to quote future projects and set rates.
For delivery roles, keeping ~70-85% of available hours billable is a healthy target - enough margin without burning the team out.
- Chasing 100% utilisation and burning people out.
- Counting hours worked as hours billed.
- Not tracking, so you cannot see the leak.
What are billable hours?
Hours worked that can be charged to a client, as opposed to internal or non-billable time. Tracked to protect margin and inform pricing.
What counts as a billable hour?
Time spent on work a client has agreed to pay for - as opposed to internal meetings, admin, pitching, or rework you absorb.
How do you track billable hours?
Log time against clients and projects as you work - a time tracker beats reconstructing it later - then review weekly to catch unbilled work.
What is the difference between billable and non-billable hours?
Billable hours go on an invoice or against a retainer; non-billable hours (standups, ops, learning) are real but are not charged to a client.