Reviewed 5 August 2026
Billable time is narrower than working time
Billable time is work a client has agreed to pay for. Running your business can also require proposals, sales calls, bookkeeping, training, equipment setup and following up overdue invoices. Those activities are real work, but they should not be counted as client hours unless the contract explicitly makes them chargeable.
Start with the contract. Record the normal hours or days the client will accept on an invoice, any cap on weekly time and the process for approving extra work. If the wording is unclear, ask before using the rate to plan income.
Build the day from invoiced hours
A day may contain eight hours at the desk but fewer billable hours after unpaid breaks, travel or administration. Conversely, some day-rate contracts define a fixed day and do not require an hourly breakdown. Use the commercial definition in the engagement rather than a generic convention.
Focused delivery day
Seven and a half client hours, with a separate unpaid lunch, may support 7.5 billable hours.
Fragmented delivery day
Six client hours plus proposals and bookkeeping may still be only 6 billable hours.
Keep overtime out of the base assumption unless it is predictable and contractually paid. Treating occasional long days as normal makes an annual forecast difficult to sustain.
Do not give every week to revenue
Begin with 52 calendar weeks, then remove planned leave, public holidays that affect the engagement, training, administration and a sensible allowance for illness or gaps between assignments. Contractors who are genuinely self-employed do not normally receive employee holiday or sick pay, so time away may reduce invoiced revenue.
Paid holiday rules depend on employment status. GOV.UK explains that most workers receive statutory paid leave, while genuinely self-employed people have different rights. If your working relationship may make you an employee or worker, check status rather than assuming the contractor label settles it.
Billable weeks are a commercial planning assumption, not a statement about legal holiday entitlement. Employment status can differ for tax and employment-law purposes.
Use a range instead of one perfect forecast
Create three versions of the same calculation. A cautious case allows for a longer gap or lower utilisation. An expected case reflects the contracts and pipeline you can support. A full case shows the upside if most available capacity is sold.
| Scenario | Working weeks | Purpose |
|---|---|---|
| Cautious | 42 | Tests resilience to a longer gap |
| Expected | 46 | Supports normal planning |
| Full | 48 | Shows an achievable upper case |
These figures are examples, not recommended defaults. Choose a range from your own leave plans, sales pipeline and past utilisation.
Review the assumption when the evidence changes
Compare planned billable time with invoices or approved timesheets each month. If actual utilisation is consistently lower, reduce the forecast or revisit pricing. If demand is consistently higher, decide whether to raise the rate, protect non-billable capacity or deliberately accept more work.
Use an hourly-to-annual or day-rate-to-annual calculator to test the scenarios without hiding the working pattern.