How to Invoice for Hours Worked: A Contractor’s Guide

What an hourly invoice needs

An hourly invoice should give your client enough information to understand who did the work, what they are paying for, and when payment is due. Include:

• Your business details: your business name and contact information.
• Client details: the client’s name or business name and the right billing contact.
• Invoice number: a unique number you can use to find the invoice later.
• Invoice date: the date you issue the bill.
• Due date and terms: when payment is due and any agreed payment terms.
• Labor line items: a description of the work, hours as the quantity, hourly rate, and line amount.
• Subtotal: the amount before applicable tax and other adjustments.
• Tax, if applicable: shown separately where appropriate.
• Total due: the amount the client needs to pay.
• Payment instructions: how the client can pay.

You may also need separate lines for materials, expenses, or other charges you agreed to bill. Keep those distinct from labor so the client can see what each charge covers.

A basic labor calculation looks like this:

Hours × hourly rate = labor amount

Say you bill a hypothetical $85 per hour and work 2.5 hours on a repair. The labor amount is $212.50 before any applicable tax or other charges.

These figures are hypothetical. Your own rates, work, and invoice requirements will differ.

How to invoice for hours worked, step by step

1. Track your time as you go

Record the work close to when it happens. A timer, a written note, or a manual time entry helps you keep a record while the details are fresh. For each entry, capture:

• The client and, when relevant, the job.
• The date of the work.
• A short description of what you did.
• The time spent.
• Whether the time is billable under your agreement.
• The rate that applies, if it differs by task or worker.

A useful description is something like “Diagnosed kitchen outlet and replaced receptacle.” It gives you and your client more context than “service call.”

Remember work away from the main job, too. Client calls, approved travel, parts pickup, research, and follow-up work may be billable if your agreement covers them. Record them so you can decide what belongs on the invoice, rather than trying to reconstruct the day later.

2. Pick a rounding rule and explain it

Decide whether you will bill exact time or round to an agreed increment. If you round, decide whether you will use the nearest increment or always round up.

Tell the client how you bill before the work starts, and check any terms you have already agreed to. A clear rule helps the client understand why the time on an invoice may differ from the time on a clock. For example, you might explain that you round each billable entry to the nearest 15 minutes. If you apply a minimum charge or round each short call up, say so as well.

3. Review unbilled time

Before you prepare the invoice, gather the entries for the client and the period you are billing. Check each one against your notes, calendar, or job record. Ask yourself:

• Is this the right client and job?
• Is the work billable under the agreement?
• Did I record the duration and description correctly?
• Does the entry use the agreed rate?
• Has any of this time already appeared on an invoice?

Separate billable and non-billable work during this review. You may want a record of both to know what a job cost you, but only the agreed billable time belongs on the client’s invoice.

4. Group the hours into clear line items

Choose a level of detail that suits the work and the client. You can group entries by task, day, or week, or use one line for the whole billing period. A homeowner may be comfortable with one clear line for a small repair. A business client with several service calls may want dates and separate descriptions.

Keep entries with different agreed rates on separate lines when the client needs to see each rate. Check that the line items add up to the work you intend to bill.

5. Check the rate and calculate each amount

Confirm the rate against your estimate, agreement, or client instructions. If you charge different rates for different work, make sure each line carries the right one. Multiply the hours by the rate, then check the subtotal and any applicable tax or agreed charges.

For example, 3.5 hours at a hypothetical $85 per hour is $297.50 of labor. If you also bill materials, list them separately rather than folding their cost into the hours.

6. Send the invoice

Check the client’s billing contact, invoice number, issue date, due date, total, and payment instructions. Make sure each description makes sense to someone who was not there for the work. If a business client has asked for a purchase order number or a particular billing contact, check those details before sending.

7. Follow up on unpaid invoices

Keep a record of what you sent and when it is due. If the due date passes without payment, check whether payment has arrived or the client has raised a question. Then send a polite follow-up with the invoice number, the amount due, and a way to reach you. For more, see the payment reminders guide.

How to round hours on an invoice

Rounding changes the time you bill from the exact duration to a chosen increment. The right approach depends on your agreement and how much detail your client expects. Common choices:

• 15 minutes: a quarter of an hour, or 0.25 hours.
• 6 minutes: a tenth of an hour, or 0.10 hours.
• 1 minute: a small increment that stays close to the time recorded.
• No rounding: keep the exact recorded duration.

With nearest rounding, time moves up or down to the closest increment. With always up, time moves up to the next increment whenever it falls between two.

Rounding example

Say a service call takes 22 minutes, your hypothetical rate is $80 per hour, and your agreement allows 15-minute rounding.

The same work produces different charges because the rounding direction differs. If you round, agree on the method before billing.

Also decide when the rule applies. Rounding each entry can produce a different total from adding the exact time first and rounding once. If the client expects a particular approach, follow the agreement and check the invoice before sending it.

In Invoice My Clients, rounding is an account setting: 15 minutes (the default), 6 minutes, 1 minute, or no rounding, to the nearest interval or always up. A positive duration never rounds below one interval, so a hypothetical 3-minute call on 15-minute rounding saves as 15 minutes. The running clock shows exact time; the saved entry keeps the rounded time. A change to the setting applies to new timers and logged time. Entries already saved keep their duration.

How to group labor hours into line items

The best format gives the client enough detail to recognize the work without making the bill hard to read. These examples use hypothetical work, hours, and rates.

Group by task description

Use this when the client wants to see the kind of work performed, especially when the job includes several different tasks.

Group by day

Group by day when the client wants to match the invoice to visits, site access records, or daily work notes. Add task details where needed: a date alone may not explain what was done.

Group by week

Weekly lines suit ongoing maintenance, IT support, consulting, or agency work where the client reviews a regular billing period. If the client needs a breakdown of individual tasks, agree on what detail goes with the invoice.

Use one single line

One line can suit a short job or a client who wants a concise bill. Keep your underlying time records anyway: they help you answer questions about the charge and check what has already been billed.

Why labor hours matter for job profit

Your invoice shows what you charge the client. Your job record shows what the work cost you.

Suppose you quote a repair for a fixed amount. Even if you do not bill that client by the hour, the labor you spend on the job still decides its profit. More hours than expected leave less after labor, materials, and other costs.

As a hypothetical example, say a job is quoted at $1,000. Recorded labor cost is $300, materials $200, and other recorded costs $100. That leaves $400 before any costs you have not included.

The useful habit is to log hours to the right job and compare actual hours with the hours you expected when you quoted. If they differ, find out why before you price the next similar job.

Your labor cost rate and the hourly rate you charge can be different. The billing rate is what appears on the invoice. The labor cost rate is what the hour costs you, and it is what job profit is measured with.

How to turn tracked time into an invoice in Invoice My Clients

Invoice My Clients lets you track time and turn selected unbilled entries into invoice lines on Professional and above. There is a free plan to start; free accounts can view time entries only. See the time tracking and time to invoice feature for an overview.

Record your time

Use the one-click timer, and pause or resume it as work stops and starts. You can also log time by manual entry, quick entry by typing, voice, AI suggestions, or calendar import from Google Calendar, Outlook, Apple Calendar, or any iCal feed. Or ask the AI assistant to start or stop a timer, log time, or invoice a client for their unbilled time.

There is one synced timer per account. Start a timer on one device and the one running anywhere else on the account stops. The Time Tracking page in the web app follows the account’s timer, so a timer started in another browser or on another device shows up there and can be paused, resumed, or stopped there. If two devices start a timer at the same moment, the last one started wins and the other stops at that moment.

A late or repeated stop, such as one from a device that was offline, never shortens logged time. A timer never changes time that is already on an invoice.

Select and preview unbilled entries

On the Time Tracking page:

1. Open the Unbilled tab.
2. Pick a client.
3. Select the unbilled billable entries you want to include.
4. Choose a grouping: Description, Day, Week, or Single.
5. Preview the line items.
6. Create a new invoice, or add the time to an existing invoice.

Each line’s quantity is the total hours to two decimal places. Its rate is the simple average of its entries’ rates, not an average weighted by hours, and the line amount is hours times rate, to the cent. If you bill the same kind of work at different rates, give those entries different descriptions so each rate lands on its own line under Description grouping, and check the preview.

Notes on entries carry into the line item details. When Description grouping covers entries from several days, the line description includes the date range. Week lines are labeled “Week of” with that week’s Monday.

The entries are marked billed and linked to the invoice and to their line item, so the same hours are not billed twice.

Check labor against a job

With job costing (Professional and above), an accepted estimate becomes a job. A timer started on that job, or time logged to it, counts as the job’s labor at the labor cost rate saved when the entry is created. Billable and non-billable time both count as labor cost, alongside materials and other costs.

The job shows quoted versus actual hours, cost, profit to date, and projected profit. It flags billable time on the job that has not been invoiced yet. If a labor rate or overhead is not set, it says so instead of guessing. A running or paused timer does not count until it is stopped.

For the broader case for keeping both in one place, read Why Time Tracking and Invoicing Belong in One Application.

Common hourly invoicing mistakes

Forgetting small pieces of work

A short call or follow-up can slip your mind by the end of the week. Record the work when it happens, then decide whether your agreement lets you bill it.

Using vague descriptions

“Labor” leaves the client wondering what the charge covers. Name the task, visit, or service period. If several entries are grouped together, keep the details available for review.

Applying the wrong rate

Rates can differ by client, task, or agreement. Check the rate on each entry and each line before you send the bill. If a line combines entries at different rates, check how its rate and amount were worked out.

Billing the same hours twice

Check whether time already appeared on an earlier invoice, especially when work spans billing periods. Keep a record that ties each entry to the invoice where you billed it.

Waiting too long to invoice

The longer you wait, the harder it is to reconstruct missing details or answer a client’s question. Pick a billing schedule that fits your agreement, and review unbilled time before each invoice goes out.