Glossary

Billable hours

The hours of a technician's paid time you can actually charge a customer for. Here is how to calculate them and find where the rest goes.

Billable hours are the hours of a technician's paid time that are charged to a customer, either directly on a time and materials invoice or as the time a flat-rate job represents.

Everything else on the timesheet is non-billable: driving (unless you bill it), shop time, training, meetings, warranty work and waiting.

How to calculate billable hours

For each technician over a period:

Billable ratio = Billable hours ÷ Paid hours

Say a technician was paid for 45 hours last week, including 5 hours of overtime, and 27 of those hours were billed to customers. Billable ratio is 27 ÷ 45, or 60%.

To see where the rest went, split the paid hours:

Paid hours = Billable + Drive + Shop and admin + Training + Warranty and callbacks + Idle

Run that split for each technician for a month. The categories that are largest are the ones to work on.

Why it matters

Billable hours are what pay for the technician, the truck and the office. If your labor rate was set assuming a technician bills 30 hours a week and they actually bill 22, every hour billed is carrying more cost than you priced for. The break-even labor rate calculator shows how much the billable ratio moves the rate you need.

Drive time is usually the largest non-billable category in field service, and most of it is set at booking. A day booked in a zig-zag has fewer billable hours than a day booked in a tight cluster, with the same technician doing the same work. The windshield time post covers measuring and pricing that drive.

Billable hours also sit close to technician utilization rate. The difference is that utilization counts all productive work, including warranty and callbacks, while billable hours count only what a customer pays for.

A common mistake

Counting flat-rate jobs at actual hours spent. If a flat-rate job is priced as 2 hours and took 3, it contributed 2 billable hours, not 3. The extra hour is real paid time that was not billed. Count it as non-billable so the ratio shows the gap.

Related terms

Common questions

What is a good billable ratio for field technicians?

It depends on trade, territory and job mix, so compare against your own history. What matters is whether the ratio matches the one your pricing assumed.

Is drive time billable?

Only if your pricing bills it, for example portal-to-portal hourly billing or a trip charge. Otherwise it is non-billable paid time.

How do you increase billable hours?

Cut non-billable time: tighter routes, fewer return trips, less waiting for parts and less time at the shop. Adding hours to the week only helps if those hours are billed.

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