Browse Definitions :
Definition

billable hours

Contributor(s): Ivy Wigmore

Billable hours are the amounts of an employee’s work time that can be charged to a client. Employers charge clients at sometimes varying rates for different employees. Billable hours are a common metric in IT consulting and legal firms, as well as others where it’s important to quantify how much time a company’s employees spend working for the company’s clients. 

Although policies for billable hours vary from one company to another, the idea is that the client is only charged for time that the employee is performing work for them. So, for example, breaks, personal time, vacation time and meetings about unrelated matters are not billable. Some things, like attending to correspondence and talking to co-workers are harder to either include or exclude.  

The amount charged to clients has to be adequate to cover the employee’s salary and other business expenses. Calculating an appropriate rate is essential, particularly for companies that depend on income from clients for most or all of their revenue. Typically, employees are expected to have billable hours equivalent to at least three times their salaries. 

Billable hours for a particular client or project may also be pooled. That can enable more effective use of human resources and less expense to the client. For example, a project manager might have a rate of $1,000 a day but employees assigned lower rates may do much of the work for a given project. The client may be charged a combined rate based on the billable hours of all employees involved in the project. 

This was last updated in July 2018

Continue Reading About billable hours

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

Dateiendungen und Dateiformate

Gesponsert von:

SearchCompliance

  • Whistleblower Protection Act

    The Whistleblower Protection Act of 1989 is a law that protects federal government employees in the United States from ...

  • smart contract

    A smart contract, also known as a cryptocontract, is a computer program that directly controls the transfer of digital currencies...

  • risk map (risk heat map)

    A risk map, also known as a risk heat map, is a data visualization tool for communicating specific risks an organization faces. A...

SearchSecurity

  • buffer underflow

    Buffer underflow, also known as buffer underrun or buffer underwrite, is a threat to data that typically occurs when the ...

  • digital signature

    A digital signature is a mathematical technique used to validate the authenticity and integrity of a message, software or digital...

  • denial-of-service attack

    A denial-of-service attack is a security event that occurs when an attacker prevents legitimate users from accessing specific ...

SearchHealthIT

SearchDisasterRecovery

  • virtual disaster recovery

    Virtual disaster recovery is a type of DR that typically involves replication and allows a user to fail over to virtualized ...

  • tabletop exercise (TTX)

    A tabletop exercise (TTX) is a disaster preparedness activity that takes participants through the process of dealing with a ...

  • risk mitigation

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a data center.

SearchStorage

  • secondary storage

    Secondary storage is storage for noncritical data that does not need to be frequently accessed.

  • Pure Storage

    Pure Storage is a provider of enterprise data flash storage solutions designed to substitute for electromechanical disk arrays.

  • yobibyte (YiB)

    A yobibyte (YiB) is a unit of measure used to describe data capacity as part of the binary system of measuring computing and ...

Close