Billing by the hour
Hourly billing is the simplest way to be paid fairly for work that's hard to predict. The key is a clear record: your client should be able to see what they're paying for at a glance, and you should be able to back it up if anyone asks.
- One line per day or per task, with a short description
- Hours in decimals — 15 min = 0.25, 30 min = 0.5, 45 min = 0.75
- Your rate on each line, so different rates (overtime, weekend, travel time) are clear
- The period covered — a week, two weeks or a month
- When and how to pay — due date and payment details
Example hourly invoice
| Line item | Qty | Rate | Amount |
|---|---|---|---|
| Mon, Oct 5 – client onboarding and setup | 3.5 | $60.00 | $210.00 |
| Tue, Oct 6 – project work | 7.25 | $60.00 | $435.00 |
| Wed, Oct 7 – project work | 6 | $60.00 | $360.00 |
| Thu, Oct 8 – meeting and follow-up | 1.5 | $60.00 | $90.00 |
| Sat, Oct 10 – weekend work (1.5× rate, agreed Oct 8) | 4 | $90.00 | $360.00 |
| Total | $1,455.00 |
Converting minutes to decimals: divide the minutes by 60. So 7 hours 15 minutes is 7.25, and 1 hour 40 minutes is about 1.67.
How often to invoice
The longer you wait, the more you've worked without being paid. Weekly or every two weeks is common for ongoing hourly work; monthly suits steady clients who pay reliably. Pick one rhythm per client and stick to it, so they know when to expect your invoice.
Rounding, minimums and overtime
Decide your rules before you start, write them in your agreement, and apply them the same way every time:
- Rounding — many people bill in 15-minute or 6-minute (0.1 hour) increments.
- Minimums — a one- or two-hour minimum for short visits or calls is common.
- Overtime and weekends — if you charge more, show it on its own line with the rate, as in the example.
- Travel time — billable or not, and at what rate.
Hourly income and taxes
If you bill by the hour as a contractor, you aren't an employee, so no tax is withheld. Remember that not every hour you work is billable: admin, sales and invoicing aren't paid. Set your rate to cover them — and to cover self-employment tax, which adds about 14.1% on your profit. The 1099 tax calculator shows how much to keep aside.
Frequently asked questions
Should I attach a timesheet?
For small invoices, the lines on the invoice are enough. For larger ones, or when the client asks, attach a timesheet with start and end times. If you use a time tracker, export its report.
How do I show a different rate for some hours?
Put those hours on their own line with the other rate, and say why in the description, like the weekend line in the example.
Can I bill hours and fixed costs together?
Yes. Add a line for each fixed cost, such as materials, a software license or a flat fee, with quantity 1.
What hourly rate should I charge?
Start with what you need to earn in a year, add your costs and taxes, then divide by the hours you can realistically bill — often far fewer than 2,000 a year. Then compare with what others in your field charge.