Billable Hours per Year: How Many You Can Really Invoice

You plan your year, multiply 8 hours a day by 5 days by 50 weeks and land at 2,000 hours. On paper, that looks good. At the end of the year you realize: you've billed maybe just over half of that. The rest has vanished into proposals, emails, bookkeeping and idle time.

That's not a personal failure, it's math. If you build your hourly rate or revenue target on 2,000 hours, you're counting on time that doesn't exist. In this article, you'll walk step by step through how many hours you can realistically bill – and which levers you can pull if the number turns out smaller than expected.

Why 2,000 hours are an illusion

Working time is not billable time

As an employee, you get paid for every hour you're in the office – whether you're sitting in meetings or checking invoices. As a freelancer, the client only pays you for what you deliver for them. Everything else is work that nobody sees on an invoice.

Billable hours are therefore only the hours you can invoice directly to a client. The time for proposals, follow-ups, bookkeeping, training or setting up your website is part of your job, but it isn't billable.

What typically doesn't end up on the invoice

If you keep honest records, these items usually show up:

• Sales and business development: initial calls, writing proposals, networking
• Admin: bookkeeping, invoices, documents for your tax advisor, contracts
• Training: courses, professional literature, learning new tools
• Idle time: waiting between projects, last-minute cancellations
• Your own projects: website, marketing, processes

How large these shares are in your case, only you know. But they're never zero. And that's exactly why the calculation is worth doing.

The calculation: from 365 days to your billable hours

The calculation has three steps. You start with the calendar, subtract all the days you don't work, and weight the remaining time by your utilization.

Step 1: Available working days

From the calendar year, first take off the weekends, then the public holidays in your federal state. Then comes your vacation – yes, you need it as a freelancer too. Add sick days, which you can't plan but should plan for, and days for training.

What's left are your available working days. Depending on vacation and federal state, this number is often closer to 210 than to 250.

Step 2: Available working hours

Multiply the working days by your hours per day. Use a number you can sustain in the long run – not the figure from your most stressful week. Eight hours is a sensible starting point; if you're looking after children or freelancing on the side, set a correspondingly lower number.

Step 3: Utilization rate

Now comes the decisive step. Estimate what share of your working hours actually goes to clients. This share is called the utilization rate or billable rate.

If you don't track your time, use a cautious assumption for the first calculation and adjust it as soon as you have real data. The important thing is that you don't calculate with 100%. Even in very good years, a noticeable share remains non-billable.

The formula is then:

Billable hours = Available working days × Hours per day × Utilization rate

Multiply the result by your hourly rate and you get your realistic annual revenue. The other way round, you can divide your revenue target by your billable hours and see which hourly rate you actually need. The article Calculating your hourly rate as a freelancer shows how to extend this calculation to include costs and owner's salary.

Worked example: a consultant with a €90,000 revenue target

The following example is fictional and for illustration only. All figures are assumptions.

Lena works as a freelance organizational consultant. She wants to reach €90,000 in revenue next year and initially calculates with 2,000 hours. Then she does the honest calculation:

Instead of 2,000 hours, around 1,100 remain. That's almost half as many – and exactly the reason why there's often less in the account at the end of the year than planned.

For Lena's revenue target, that means:

Had Lena calculated with €45, she would have ended up at just under €50,000 in revenue with her actual utilization. Not because she worked too little, but because she calculated with hours that don't exist.

The levers: what you can change about the number

The bad news first: more hours a day or less vacation aren't levers. Nobody sustains either for long, and both usually come back to bite you in the form of sick days. The good levers are elsewhere.

Lever 1: Streamline admin

Bookkeeping, invoices and filing often eat up more time than you'd think – especially when they happen in between other things. Fixed time blocks, a clean invoicing system and templates for recurring tasks noticeably reduce this share.

Suppose Lena cuts her admin share from 10% to 6%. That's around 68 more hours she can use for clients – at €81 per hour, roughly €5,500 in revenue.

Lever 2: Avoid idle time

Idle time arises when one project ends and the next hasn't started yet. If you only do business development when there's nothing else to do, you're producing this idle time yourself. One fixed hour per week for contacts and follow-ups – even in busy phases – smooths out the curve.

If Lena reduces her idle time from 10% to 7%, she gains another 51 hours or so. Together with lever 1, she ends up at about 1,227 billable hours instead of 1,108. That's just under 120 hours, or around €9,600 more in revenue – at the same hourly rate and the same working hours.

Lever 3: Adjust your hourly rate to the real number

The biggest lever often isn't the number of hours at all, but the price. If you know you'll bill 1,100 hours rather than 2,000, your hourly rate needs to reflect that. Every extra euro per hour applies to all billable hours: at 1,108 hours, €5 more per hour brings in around €5,500 a year.

Your hourly rate needs to cover not just your costs and your owner's salary, but also taxes and reserves. What those amounts are in your specific case is best clarified with your tax advisor – a planning tool like THA·ONE is a calculation aid, not tax advice within the meaning of the German Tax Advisory Act (StBerG).

Lever 4: Flat fees instead of hours

If you bill by the hour, you have a natural ceiling. For clearly defined services – a workshop, a concept, an audit – a fixed price can make sense. Then it's no longer the hour that counts, but the result. Your billable hours still remain your calculation basis: you need them to check whether the fixed price actually covers your time.

How to use the number in everyday life

The calculation isn't a one-off project. It makes sense to do it once a year and then check quarterly: are you at the utilization you assumed? If not, you have two options – improve your utilization rate or adjust your hourly rate.

Simple time tracking helps more here than any estimate. Two categories are enough to start with: billable and non-billable. After three months, you'll have a rate that's based on your data instead of gut feeling.

If you don't want to do the calculation by hand: the free hourly rate calculator takes care of the first step for you. If you need more precision, with public holidays by federal state, scenarios and break-even, you'll find the right tool on the pricing calculation page.

Conclusion

The number 2,000 hours is a figure from employed life and doesn't fit freelancers. Realistically, after vacation, public holidays, sickness, sales and admin, considerably less remains – in the example above, a little more than half.

If you calculate with the real number, you get an hourly rate that holds up and a revenue target that's achievable. And if you know the levers – less admin, less idle time, the right price – you can improve the number step by step without working more.

Do the calculation honestly, once. It's the difference between a plan that works on paper and one that actually arrives in your account at the end of the year.