Harvest
Time Tracking
Sign up free

How to Bill Clients by the Hour

Struggling with hourly billing? Harvest simplifies time tracking and invoicing, ensuring accurate and transparent client billing with ease.

Try Harvest Free

What should you charge per hour?

Most freelancers and consultants dramatically undercharge. This calculator accounts for what most people miss: non-billable time, taxes, and overhead.

$
Accounting for vacation, holidays, sick days
60%
Most freelancers can bill 50-70% of their time. The rest goes to admin, marketing, proposals, and learning.
$
Software, insurance, equipment, accounting, taxes beyond income tax, etc.
Your break-even rate $0
Recommended rate (+20% buffer) $0
Billable hours per week 0h
Equivalent daily rate $0

Start tracking your billable hours

Walk through the entire flow below. Start a timer, check your reports, and create a real invoice — all in three clicks.

Go ahead — start tracking!

One click and you're timing. Try it right here: start a timer, add an entry, edit the details. This is exactly how it feels in Harvest.

  • One-click timer from browser, desktop & mobile
  • Works inside Jira, Asana, Trello, GitHub & 50+ tools
  • Duration or start/end — your call
  • Day, week & calendar views to stay on top of it all
  • Friendly reminders so no hour gets left behind
Acme Corp
Website Redesign
Homepage layout revisions
1:24:09
Content Strategy
Blog calendar planning
1:30:00
SEO Audit
Technical audit report
0:45:00
Brand Guidelines
Color system documentation
2:15:00
Logo Concepts
Initial sketches round 1
1:00:00
Today's total 6:54:09

Understanding Hourly Billing Fundamentals

Hourly billing is a pricing model where clients pay for the actual time spent on work at an agreed hourly rate. This approach is ideal for projects with a flexible scope, such as consulting and creative work. The formula for calculating the invoice amount is straightforward: Invoice Amount = Billable Hours × Hourly Rate. Additional charges like taxes or expenses can be added separately. In 2024, the average hourly rate for freelancers in the U.S. is $48, with rates varying widely based on industry and expertise.

Choosing hourly billing offers several advantages, such as transparency and adaptability to scope changes. It allows professionals to demonstrate exactly how their time is spent, which can be reassuring to clients seeking value and accountability. However, it may also require a detailed approach to time tracking and invoicing to ensure all billable work is accurately captured and communicated.

Setting Your Hourly Rate Strategically

Determining a fair and profitable hourly rate involves several considerations including experience, industry norms, and geographic location. For instance, in North America, the average hourly rate for freelancers is $56, while globally it averages $101.50. When setting your rate, it’s crucial to calculate all operational costs, desired salary, and non-billable time to arrive at your "true" hourly rate.

Harvest facilitates this process by enabling flexible per-project and per-person rates, allowing you to accommodate different roles and tasks. By researching industry benchmarks and clearly communicating your rates to clients, you can justify your value and ensure that your pricing reflects both expertise and market standards. For example, legal professionals might charge between $35-$96 per hour, while digital marketers range from $35-$85 per hour.

Best Practices for Accurate Time Tracking and Invoicing

Accurate time tracking is essential to avoid under-reporting, which can lead to a 15-25% loss in billable income. Using real-time tracking tools like Harvest can streamline this process. Harvest offers one-click start/stop timers that automatically log time to projects and tasks, ensuring precision and accountability. Tracking time in consistent increments, such as 6 or 15 minutes, can further enhance accuracy.

Professional invoicing is another critical component. A well-structured invoice should include your business details, client information, a unique invoice number, and a breakdown of work performed. Harvest's professional invoices clearly communicate hourly rates and task descriptions, which helps maintain transparency and prevent disputes. This level of detail fosters trust and ensures prompt payments, thus safeguarding your revenue streams.

Navigating Ethical Considerations and Client Relationships

Hourly billing can present ethical challenges, particularly regarding the potential incentive for inefficiency. However, tools like Harvest help mitigate these concerns by offering detailed reporting and transparent communication. By clearly differentiating between billable and non-billable hours, Harvest ensures that clients only pay for the work done on their projects.

Building client trust involves transparent communication and managing expectations around project scope and costs. Harvest supports this by allowing adjustments for scope changes and additional tasks, ensuring that all billed hours are justified and agreed upon. This approach not only maintains ethical standards but also strengthens client relationships by demonstrating fairness and accountability.

How to Bill Clients by the Hour with Harvest

See how Harvest tracks billable hours and creates detailed invoices for effective hourly billing.

Screenshot of Harvest's time tracking and invoicing interface for hourly billing.

How to Bill Clients by the Hour FAQs

  • Freelancers can track billable hours effectively by using real-time tracking tools like Harvest. It offers one-click timers that automatically log time as work happens, reducing errors from manual entry and ensuring all billable work is captured accurately.

  • An invoice for hourly work should include your business name, client information, a unique invoice number, and a detailed breakdown of tasks with their respective hours and rates. Harvest's professional invoices help you clearly communicate this information, ensuring transparency and prompt payment.

  • Harvest supports billing scope changes by allowing adjustments to billable hours and rates. This flexibility ensures that any additional tasks or changes in project scope are accurately reflected in your billing, maintaining transparency with clients.

  • Accurate time tracking is crucial for hourly billing as it prevents under-reporting, which can result in a 15-25% loss of billable income. Tools like Harvest provide real-time tracking to ensure that all work is recorded precisely, supporting fair compensation.

  • Common mistakes in hourly billing include inconsistent time tracking and unclear invoices. Using a tool like Harvest helps avoid these errors by offering one-click timers and professional invoices that ensure all work is logged accurately and communicated clearly to clients.

  • To set your hourly rate, consider your operational costs, desired salary, and industry benchmarks. Use tools like Harvest to manage different rates for various tasks, ensuring your prices reflect both your expertise and market standards.

  • Yes, Harvest can differentiate between billable and non-billable hours, ensuring that only the work directly related to client projects is billed. This helps in maintaining accurate invoicing and transparency with clients.