Billable Hours Calculator
Billable hours are the hours you can actually invoice, which is always less than hours worked. This calculator turns working hours and a utilization rate into annual billable hours and expected revenue.
- Annual billable hours
- 1,344 hours
- Billable hours per week
- 28 hours
- Annual revenue capacity
- $201,600.00
How it works
Annual Billable Hours = Hours per Week x Weeks Worked x Utilization %
Enter weekly working hours, how many weeks a year you work after holiday and leave, the share of time that is billable (utilization), and your hourly rate.
Utilization is the honest number that makes or breaks this calculation. Admin, business development, training, and email are real hours that never hit an invoice. Most professionals bill 60% to 80% of worked time.
Worked example
A 40-hour week, 48 working weeks, and 70% utilization yields 28 billable hours a week and 1,344 billable hours a year. At $150 per hour that is $201,600 of annual capacity.
A utilization rate of 70% to 80% is a common target for professional services staff; partners and owners typically bill much less because of management and sales time.
6-minute billing increment chart (tenths of an hour)
| Minutes worked | Billed increment |
|---|---|
| 1 to 6 | 0.1 |
| 7 to 12 | 0.2 |
| 13 to 18 | 0.3 |
| 19 to 24 | 0.4 |
| 25 to 30 | 0.5 |
| 31 to 36 | 0.6 |
| 37 to 42 | 0.7 |
| 43 to 48 | 0.8 |
| 49 to 54 | 0.9 |
| 55 to 60 | 1.0 |
Frequently asked questions
- How do 6-minute increments work?
- Time is billed in tenths of an hour. Any portion of a 6-minute block rounds up to the next tenth, so a 4-minute email is billed as 0.1 hours.
- What is a realistic utilization rate?
- 60% to 80% for most fee earners. If your plan assumes 90%+, the revenue forecast is almost certainly optimistic.
- How many billable hours is full time?
- At 40 hours a week, 48 weeks, and 70% utilization, about 1,340 a year. Large law firms famously target 1,800 to 2,000, which implies far longer working weeks.
- Should I track non-billable time too?
- Yes. You cannot improve utilization you do not measure, and non-billable time often hides work that should be productized or automated.
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