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Every hour you record in TimeTracker is either billable or non-billable. It is a single switch on the time entry, and it decides one thing:
Billable hours can appear on an invoice. Non-billable hours cannot.
That is the whole rule. Everything else follows from it.

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What is a billable hour?

A billable hour is time you can charge a client for. Sarah spends 3 hours designing Bluebird Coffee’s homepage. Bluebird is paying for that design work, so those 3 hours are billable. At her 100/hourrate,theyareworth∗∗100/hour rate, they are worth **300** to the project.

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What is a non-billable hour?

A non-billable hour is real work that the client does not pay for directly. Sarah spends 1 hour in Northwind’s Monday team meeting. It is genuine work, and it still goes on her timesheet – but nobody invoices a client for it.

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Both are still tracked

This is the part people get wrong when they come from a simple timer. Non-billable does not mean “do not record it”. A non-billable hour:
  • Still appears on your timesheet
  • Still counts toward your expected hours for the week
  • Still shows up in reports
  • Still costs the business money, so it still affects margin
  • Just never lands on an invoice
If you stop recording non-billable time, your timesheet stops matching your week and your utilisation numbers become fiction.

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Common examples

These are conventions, not rules. Your agreement with the client decides. Some agencies bill for project management; some fold it into the rate.

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A worked example

Sarah’s week at Northwind Studio: Totals: 39 hours tracked. 35 billable, 4 non-billable. At her 100/hourrate,Sarahgenerated∗∗100/hour rate, Sarah generated **3,500** of billable value that week. Her utilisation is 35 ÷ 39 = 90%. That number only exists because she recorded the non-billable hours too.

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Why it matters beyond the invoice

The billable switch drives four things:

Invoices

Only billable time is offered when you build an invoice from tracked hours.

Budgets

A money budget is consumed by billable value.

Margin

Revenue comes from billable hours. Cost comes from every hour.

Reports

Utilisation, realisation and effective rate all split on this field.
The margin point is the important one. Non-billable hours earn nothing but still cost you. If Sarah spends half her week in internal meetings, the business pays her for 39 hours and can only charge for 20. That gap is where agency profit quietly disappears, and it is invisible unless you record both kinds.

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How to set it

The billable switch sits on the time entry itself.
1

Open the time entry

Create it with the timer or add it manually.
2

Set the billable switch

Turn it on for client-chargeable work, off for internal work.
3

Save

The entry is priced immediately using the rate that applies to you on that project.
Most workspaces set a sensible default so people rarely have to think about it. See time entry fields.

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Changing it later

You can flip an entry from billable to non-billable, or back, as long as the time is still editable. Once a timesheet is approved, its entries are locked. Changing the billable flag then needs someone with time.adjust, or the approval has to be reopened. That is deliberate – approved time is the basis for invoices, so it should not shift underneath them. See adjustments.
If an hour has already been invoiced, changing its billable flag does not change the invoice. The invoice is its own record. Credit or void the invoice instead. See void an invoice.

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Billable is not the same as billed

Three different things, often confused: An hour can be billable for weeks before anyone invoices it. Reports let you find billable-but-not-yet-billed time, which is usually money sitting on the table.

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Permissions

Someone without rate.viewBilling still sets the billable switch – they just do not see the money it produces.

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Common questions

Yes. It is the only way your timesheet matches your real week, and the only way utilisation and margin mean anything. A week of 100% billable hours is usually a week of missing entries.
Yes. Internal projects – your own website, R&D, admin – are commonly set up so everything on them is non-billable by default.
An hours budget counts the hours you agreed to spend, so non-billable time on that project consumes it. A money budget is consumed by billable value. See hours vs money budgets.
Leave the entry as it was and handle it on the invoice – reduce the line or issue a credit. Rewriting history makes your utilisation reporting wrong.
Yes, through the project and workspace defaults. Just be sure your team still switches it off for internal work, or your margin numbers will flatter you.

Billable rates

What an hour is worth, and where the rate comes from.

Invoice from tracked time

Turning billable hours into a bill.

Profitability and margin

Where the non-billable hours show up.

How to track time

Recording the hours in the first place.