PROFIT & CAPACITY / RUNBOOK BUREAU
How Many Billable Hours Should a Freelancer Have?
Plan billable hours from the working time you have left after running the business, rather than aiming for a universal percentage. The right figure depends on your services, pricing model, experience, admin load, client mix and current sales activity. Use recent time records to test what is realistic for your business.
Distinguish working time, client time and billable time
Total working time includes everything you do for the business. Client time is the effort spent serving clients. Billable time is the portion chargeable under your agreement; the three are not automatically equal.
A client meeting may be chargeable under an hourly arrangement, included in a fixed project fee, or absorbed without an extra charge. Classify it consistently. For fixed-fee work, tracking delivery hours still helps you estimate capacity, but those hours are not necessarily separately invoiced. State which definition your billable percentage uses.
Allow for the work that keeps projects coming
- Admin and finance: bookkeeping, invoice checks, scheduling and maintaining records.
- Sales: qualification, discovery before engagement, proposals and follow-ups.
- Marketing: updating your portfolio, publishing relevant material and building professional relationships.
- Learning and maintenance: training, software upkeep and improving working methods.
- Client coordination: distinguish project-specific meetings from general relationship or sales conversations.
Leave and time away reduce the working hours available in the period; business tasks use part of the remaining hours. Avoid subtracting either twice. A business with steady repeat work may have a different sales load from one seeking new projects every month.
Calculate a starting capacity from your own week
- Choose a period and record the hours you realistically intend to work after time off.
- Estimate the non-billable business tasks within those hours using recent records where possible.
- Subtract those tasks to find the maximum time left for chargeable work under your definition.
- Allow for unfilled time and uncertainty before treating that maximum as forecast sales.
- Calculate billable percentage = expected billable hours ÷ total available working hours × 100.
Use a few representative periods, including quieter ones. Capacity is what could be delivered; expected billable hours also depend on whether suitable work is booked. A calendar with room for clients is not evidence that those hours will sell.
A simple weekly example
Suppose you plan a 35-hour working week after time off. You allow 3 hours for admin and finance, 4 for sales and marketing, and 2 for learning and maintenance. That leaves 35 − 9 = 26 hours available for chargeable work in this simplified example.
You expect to bill 22 hours because the remaining 4 hours may be unfilled or needed for unexpected work. Expected billable percentage = 22 ÷ 35 × 100 = 62.86%, rounded. This is an illustrative forecast, not an ideal target.
If the upcoming week requires more proposals or client coordination, change the assumptions. Do not keep the same percentage simply because it made the earlier calculation look comfortable.
Why this changes the rate your business needs
The fewer hours you expect to bill, the more each billed hour must contribute towards the same income goal and expenses. Dividing an annual target by every working hour understates the required rate when some of those hours are not sold.
Use the billable-hour estimate as an input to pricing, then compare it with actual records. Increasing the assumed percentage can lower the calculated rate without making the workload achievable. Revisit the service, costs, price and available work together.
Mistakes that overstate billable capacity
- Using the busiest delivery week as the forecast for the whole year.
- Treating all client contact as billable without checking the agreed charging basis.
- Ignoring proposals, accounts and maintenance because they happen outside delivery hours.
- Subtracting admin first, then applying a percentage that excludes the same admin again.
- Equating available hours with sold hours.
- Chasing a higher percentage while leaving no time to replace completed projects with new work.
Test the next few weeks before changing your target
Compare working hours with confirmed work, business tasks and tentative projects. The Freelancer Capacity Planner helps you review weekly availability and proposed allocations before accepting more work.
To see how your billable-time estimate affects a starting rate, use the Free Freelance Rate Quick Calculator. It is available through Kit email signup. Get the Free Freelance Rate Quick Calculator →
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