> ## Documentation Index
> Fetch the complete documentation index at: https://docs.timetracker.in/llms.txt
> Use this file to discover all available pages before exploring further.

# Billable vs non-billable hours

> What billable hours are, how they differ from non-billable hours, why you should track both, and how TimeTracker uses the difference to price work and build invoices.

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.

## 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/hour rate, they are
worth **$300\*\* to the project.

## 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.

## 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](/timesheets/overview)
* Still counts toward your expected hours for the week
* Still shows up in [reports](/reports/overview)
* 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.

## Common examples

| Usually billable                       | Usually non-billable         |
| -------------------------------------- | ---------------------------- |
| Client design and build work           | Internal team meetings       |
| Client calls and workshops             | Sales calls and pitching     |
| Requested revisions                    | Fixing your own mistake      |
| Research the client asked for          | Training and learning        |
| Project management the client pays for | Admin, timesheets, invoicing |
| On-site client visits                  | Company all-hands            |

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

## A worked example

Sarah's week at Northwind Studio:

| Day       | Work                         | Hours | Billable? |
| --------- | ---------------------------- | ----- | --------- |
| Monday    | Team meeting                 | 1     | No        |
| Monday    | Bluebird homepage wireframes | 6     | Yes       |
| Tuesday   | Bluebird homepage wireframes | 8     | Yes       |
| Wednesday | Harbor app screens           | 7     | Yes       |
| Wednesday | Internal design review       | 1     | No        |
| Thursday  | Harbor app screens           | 8     | Yes       |
| Friday    | Bluebird revisions           | 6     | Yes       |
| Friday    | Timesheets and admin         | 2     | No        |

**Totals:** 39 hours tracked. **35 billable**, 4 non-billable.

At her $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.

## Why it matters beyond the invoice

The billable switch drives four things:

<CardGroup cols={2}>
  <Card title="Invoices" icon="file-invoice" href="/invoicing/invoice-from-tracked-time">
    Only billable time is offered when you build an invoice from tracked hours.
  </Card>

  <Card title="Budgets" icon="chart-pie" href="/budgets/how-budgets-work">
    A money budget is consumed by billable value.
  </Card>

  <Card title="Margin" icon="percent" href="/budgets/profitability-and-margin">
    Revenue comes from billable hours. Cost comes from every hour.
  </Card>

  <Card title="Reports" icon="chart-line" href="/reports/overview">
    Utilisation, realisation and effective rate all split on this field.
  </Card>
</CardGroup>

**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.

## How to set it

The billable switch sits on the time entry itself.

<Steps>
  <Step title="Open the time entry">
    Create it with the timer or add it manually.
  </Step>

  <Step title="Set the billable switch">
    Turn it on for client-chargeable work, off for internal work.
  </Step>

  <Step title="Save">
    The entry is priced immediately using the rate that applies to you on that
    project.
  </Step>
</Steps>

Most workspaces set a sensible default so people rarely have to think about it. See
[time entry fields](/time-tracking/time-entry-fields).

## 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](/approvals/adjustments).

<Warning>
  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](/invoicing/void-an-invoice).
</Warning>

## Billable is not the same as billed

Three different things, often confused:

| Term         | Meaning                                |
| ------------ | -------------------------------------- |
| **Billable** | This hour *can* be charged             |
| **Billed**   | This hour *has been* put on an invoice |
| **Paid**     | The client has settled that invoice    |

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.

## Permissions

| Action                         | Capability         |
| ------------------------------ | ------------------ |
| Set billable on your own entry | `time.track`       |
| Change it on your own entry    | `time.edit`        |
| Change it on someone else's    | `time.editOthers`  |
| Change it after approval       | `time.adjust`      |
| See the value in money         | `rate.viewBilling` |

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

## Common questions

<AccordionGroup>
  <Accordion title="Should I record non-billable time at all?">
    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.
  </Accordion>

  <Accordion title="Can a whole project be non-billable?">
    Yes. Internal projects – your own website, R\&D, admin – are commonly set up so
    everything on them is non-billable by default.
  </Accordion>

  <Accordion title="Does non-billable time use up a budget?">
    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](/budgets/hours-vs-money-budgets).
  </Accordion>

  <Accordion title="What if a client refuses to pay for hours I marked billable?">
    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.
  </Accordion>

  <Accordion title="Can I make everything billable by default?">
    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.
  </Accordion>
</AccordionGroup>

## Related guides

<CardGroup cols={2}>
  <Card title="Billable rates" icon="dollar-sign" href="/rates/billable-rates">
    What an hour is worth, and where the rate comes from.
  </Card>

  <Card title="Invoice from tracked time" icon="file-invoice" href="/invoicing/invoice-from-tracked-time">
    Turning billable hours into a bill.
  </Card>

  <Card title="Profitability and margin" icon="percent" href="/budgets/profitability-and-margin">
    Where the non-billable hours show up.
  </Card>

  <Card title="How to track time" icon="stopwatch" href="/time-tracking/how-to-track-time">
    Recording the hours in the first place.
  </Card>
</CardGroup>