Billable Hours Calculator

What this calculator does

If you bill for your time, whether you are a lawyer, a consultant, a freelancer, or anyone who charges by the hour, your income comes down to one sum: your rate multiplied by the time you worked. This calculator does that sum, and it lets you work in whatever units suit you, a rate per hour or per day, time logged in hours or in minutes, and gives you the value of the work.

How it turns time into money

At its heart this is rate times time, which sounds too simple to need a calculator until you realise the two often come in different units. Your rate might be quoted per hour while you logged the job in minutes, or your rate might be a daily one against time you tracked in hours. The tool converts both sides to a common footing and multiplies them, so you do not have to juggle the conversions in your head.

The cleanest results come when your rate and your time are expressed in matching units, a per-hour rate against hours worked, for instance. Keep them aligned and the answer is exactly what you would expect: the hours you put in, priced at your rate.

A worked example

Say your billable rate is 150 an hour and you worked 40 hours on a project. The billable value comes to $6,000.

That is the whole of it: 40 hours of your time, at 150 an hour, is 6,000 of work to invoice. Change the rate or the hours and the figure moves with them, which makes this a quick way to price a piece of work before you start, or to total up what a finished job is worth.

Why capturing every minute matters

Here is the part that quietly decides how much you actually earn, and it is not the arithmetic. It is the discipline of recording your time. When you bill by the hour, any time you forget to log is money you simply never invoice, and it adds up faster than most people believe.

The legal profession has studied this closely, and the American Bar Association notes that professionals who wait until the end of the day to record their time tend to lose around 10 to 15 percent of their billable hours, and those who leave it a week can lose a quarter of it. The lesson holds for anyone who bills time. Two habits protect you: record your time as you go rather than reconstructing it later from memory, and track in small increments, since much of the legal world bills in six-minute units, a tenth of an hour, precisely so that short tasks do not vanish. Bill promptly and bill in small pieces, and far more of your work actually makes it onto the invoice. To see what your billable work adds up to over a year, our annual income calculator helps, and the salary to hourly calculator is handy for comparing an hourly rate to a salary.

How to use it

• Billable rate. Your charge, and the unit it is in, from per minute up to per month.
• Billable time. The time you worked, and its unit, from hours up to months.

For the most intuitive result, keep the rate and the time in matching units, such as a per-hour rate with time in hours. Press Calculate for the billable value, and Reset to clear it.

Questions people ask

How do you calculate billable hours?

Multiply your billable rate by the amount of time you worked, in matching units. At 150 an hour for 40 hours, the billable value is 6,000. The calculator handles the unit conversions so you can enter the rate and time however you have them.

What is a billing increment?

It is the smallest unit of time you round to when logging work. Much of the legal profession bills in six-minute increments, which is one tenth of an hour, so that short tasks like a quick call still get captured and charged.

How do I avoid losing billable time?

Record your time as you work rather than trying to remember it later, and log in small increments. Studies of legal billing show that delaying entries can cost you 10 to 25 percent or more of your billable hours, so prompt, granular tracking directly protects your income.

References

The guidance on capturing billable time promptly, the losses from delayed timekeeping, and the use of small billing increments follow the American Bar Association's practice resources on legal billing and time tracking.

1. American Bar Association. Tips and Tools for Capturing Billable Time. americanbar.org
2. American Bar Association. Time-tracking software tools for law firms. americanbar.org