How do I invoice clients for hourly work in the US?

Getting paid for hourly work in the US: the big picture

Invoicing clients for hourly work in the United States sounds simple—track your time, multiply by your rate, send a bill, get paid—but the details matter. A clear invoice reduces back-and-forth, speeds up approvals, protects your cash flow, and makes you look professional. It also creates a clean paper trail for bookkeeping and taxes. Whether you’re a freelancer, consultant, contractor, agency, or small service business, the goal is the same: document what you did, when you did it, how much time it took, what it costs, and how the client can pay you quickly.

This guide walks through a practical, US-focused approach to invoicing hourly work, including how to set up your hourly billing structure, what to include on invoices, how to handle overtime, retainers, reimbursable expenses, sales tax (when applicable), late fees, and dispute-proof descriptions. You’ll also see how to keep your process consistent month to month so clients know exactly what to expect.

Step 1: Confirm your billing agreement before you invoice

Before you send an invoice, make sure you and the client share the same expectations. Many payment delays come from mismatched assumptions about hourly rates, what counts as billable time, and how often you invoice. Ideally, confirm these items in a contract, statement of work, email, or onboarding document—anything you can reference later.

At a minimum, your agreement should define:

1) Your hourly rate (and whether different tasks have different rates). If you have a standard rate but sometimes offer discounts, state whether the invoice shows the standard rate and a discount line, or simply uses the discounted rate.

2) What is billable time. For example, are internal meetings billable? Is research billable? What about client calls, emails, travel time, or waiting time? Clarity here prevents disputes.

3) Your billing increments. Common increments are 6 minutes (0.1 hour), 15 minutes (0.25 hour), or per minute. Clients often prefer 0.1-hour increments because it’s easy to understand and still fairly granular.

4) When you invoice. Weekly, biweekly, monthly, or at project milestones. For longer engagements, monthly invoicing is common; for faster cash flow and lower risk, weekly or biweekly can be better.

5) Payment terms. Examples: “Due on receipt,” “Net 7,” “Net 15,” or “Net 30.” In the US, net-15 and net-30 are common for business clients, but you can choose what matches your leverage and industry.

6) Approved expenses and reimbursements. Define what you can bill back (software subscriptions, travel, supplies, mileage, etc.) and what requires pre-approval. If you’re dealing with a client’s procurement process, ask how they want receipts attached or summarized.

7) Late fees. If you plan to charge them, specify the rate and when it starts. Some clients require a grace period; others prohibit late fees. Align this early to avoid unpleasant surprises.

Step 2: Track time like you’ll have to defend it

Hourly invoices are only as strong as the time records behind them. You do not need to overwhelm clients with minute-by-minute detail, but you should track enough to answer questions confidently if they arise. Good time tracking is also a gift to your future self when you need to analyze profitability or resolve “What was this for?” conversations months later.

Best practices for time tracking include:

Use consistent categories. Group your work into recognizable buckets such as “Discovery,” “Design,” “Development,” “Project management,” “Meetings,” “Reporting,” “Content creation,” “Client communication,” “QA/testing,” and “Support.” Use what fits your line of work.

Write short, specific notes. “Worked on project” is vague; “Implemented payment form validation and error handling” is clear. Specific notes reduce friction and make approvals faster.

Track in real time. Reconstructing hours days later increases errors and can make you underbill or overbill.

Follow your rounding rules. If you bill in 0.1-hour increments, build that into your tracking method so your totals match your invoice method.

Separate billable and non-billable time. Some hours—like business development, internal admin, or learning unrelated tools—generally should not be billed unless your agreement says otherwise.

Step 3: Decide how detailed your hourly invoice should be

Different clients want different levels of detail. Some want a simple summary line and a total; others expect a full breakdown by date and task. The trick is balancing clarity with readability. The invoice itself should be easy to scan, while supporting details can be attached or included as an expandable report when needed.

Three common formats for hourly invoices are:

Summary-only: One line such as “Professional services for January 2026 — 18.5 hours @ $150/hour.” This works when there’s high trust, a simple scope, or a retainer arrangement. The risk is that a client with strict internal approvals may reject it for lack of detail.

By category: A handful of lines like “Meetings — 3.0 hours,” “Design — 6.5 hours,” “Implementation — 9.0 hours,” each with the same rate. This is often the sweet spot: enough clarity without overwhelming them.

By date + task: A detailed time log listing each date, the task, hours, rate, and line total. This is best for enterprise clients, agency subcontracting, or any arrangement where billable hours are closely scrutinized.

If you’re unsure, start with category-level detail and be ready to provide a time report as a PDF if requested. Over time, you’ll learn which clients want a deeper breakdown.

Step 4: What an hourly invoice in the US should include

US clients generally expect invoices to contain certain basics, and some companies have specific requirements to route invoices through accounts payable. Missing fields can delay payment even if your work was perfect.

Include these essentials:

Your business identity: Your name or business name, address (or at least city/state), phone, and email. If you operate under an LLC or corporation name, be consistent across invoices and your bank account.

Client details: Client name and billing address. If they have a billing contact, include it. If they require a vendor ID, include it as well.

Invoice number: Use a unique invoice number sequence. Many businesses use formats like 2026-001 or INV-1042. Consistency is more important than style.

Invoice date: The date you issue the invoice.

Service period: For hourly work, add a clear time window such as “Service period: Jan 1–Jan 15, 2026.” This helps clients reconcile charges.

Line items: The services billed, hours, rate, and line totals. Even if you summarize, make the math obvious.

Subtotal, taxes (if applicable), total due: Present totals cleanly. If tax does not apply, you can omit it or show “Tax: $0.00” depending on your preference.

Payment terms: “Due upon receipt” or “Net 15” plus a due date can reduce confusion.

Payment instructions: How to pay you—card, ACH, bank transfer, check, etc. The fewer steps, the faster you get paid.

Notes: A small section for a thank you message, late fee policy reminder, or a brief scope note.

Step 5: Build line items that prevent disputes

Hourly invoices are most dispute-proof when each line item answers three questions: what did you do, how long did it take, and when did it happen. Your goal is to provide enough context that the client doesn’t have to ask for clarification.

Examples of strong hourly line items:

“Project management and client communication (Service period Jan 1–Jan 15) — 4.2 hours @ $120/hr”

“Design revisions and layout updates for landing page — 6.0 hours @ $120/hr”

“Bug fixes and QA testing for checkout flow — 3.5 hours @ $120/hr”

“Monthly reporting and performance review meeting — 2.0 hours @ $120/hr”

If you use different rates for different services (common in consulting and agencies), clearly label them. For example, “Senior consulting — $200/hr” and “Implementation — $150/hr.” Clients are more comfortable with tiered rates when they see that the high rate is used for high-leverage tasks.

Step 6: Handle retainers and “hours included” correctly

Many US clients prefer retainers because they simplify planning and budgeting. Retainers can be structured in different ways, and the way you invoice should match the structure.

1) Retainer as a prepayment for hours: The client pays upfront for a block of hours each month (for example, 10 hours). Your invoice might show the retainer fee and then a time report showing how the hours were used. If they exceed the included hours, you invoice the overage at the hourly rate.

2) Retainer as a reservation fee (availability): The client pays to reserve capacity, not necessarily to consume a fixed set of hours. In this model, you invoice the monthly retainer as a fixed fee and may still track time internally. You and the client should agree on what’s included and how additional work is billed.

3) Hybrid model: A base monthly fee plus hourly billing for extra work. Your invoice should clearly separate the base fee from hourly work to avoid confusion.

Regardless of model, include a service period and a clear explanation of how unused hours are treated (rollover, expire, or convert to another form of value). Many disputes come from unspoken assumptions about rollover.

Step 7: Reimbursable expenses and mileage

Hourly invoices often include reimbursable expenses such as software licenses, travel, printing, shipping, or specialized materials. In the US, clients typically expect expenses to be listed separately from labor, with a short explanation and receipts when appropriate.

Best practices:

List each expense as its own line item with a date and description. For example, “Project-related stock photo license — Jan 12 — $29.00.”

Attach receipts or keep them available. Some clients require receipts for any expense above a certain threshold.

If you bill mileage, use a consistent method and document the route and purpose (e.g., “Client on-site visit”). Mileage reimbursement rates vary by agreement; confirm what your client expects rather than assuming.

Step 8: Taxes, sales tax, and what most hourly services do in practice

When US freelancers hear “tax,” they often think of income tax and self-employment tax. Those are important for your personal and business finances, but they generally don’t appear as a line item on invoices. Instead, the invoice tax question usually means sales tax and similar transaction taxes. Whether you must charge sales tax depends on what you sell, where you and your customer are located, and your state’s rules.

Many professional services are not subject to sales tax in many states, but there are exceptions. Some states tax certain services, and some digital services or software-related services can be treated differently depending on the situation. If you’re unsure, it’s smart to check your state’s guidance or consult a tax professional, because charging the wrong tax—or failing to charge a required tax—can create headaches later.

Practical invoicing approach:

If tax applies, show it as a separate line with the rate and amount. If tax does not apply, you can omit it or include a “Tax: $0.00” line to make the absence explicit.

Step 9: Payment terms that actually get you paid

Payment terms are more than a formality; they shape client behavior. The more specific and frictionless your terms are, the fewer delays you’ll face.

Consider including:

Due date: Even if you say “Net 15,” also include “Due date: Feb 12, 2026” so there’s no ambiguity.

Accepted payment methods: Credit/debit card, ACH, bank transfer, or check. Digital payments usually win for speed.

Late fees: If your agreement allows it, state your late fee policy clearly (for example, “A late fee may apply to overdue balances”). Some clients will only pay late fees if they were disclosed in advance.

Early payment incentives (optional): Some businesses offer a small discount for quick payment, but only do this if it makes sense for your margins and doesn’t train clients to always expect a discount.

Deposit requirements (optional): For new clients or higher-risk projects, you can invoice a deposit before starting and then invoice hours against it.

Step 10: Net 30 clients and accounts payable reality

If you work with established companies, you may run into standard accounts payable cycles. Some organizations pay only on certain days of the month or require invoices to be submitted through a portal. It’s not personal; it’s process.

To reduce delays:

Ask how they want invoices delivered. Email, portal upload, or vendor system? Follow their process exactly.

Ask whether they require a purchase order (PO). If so, include the PO number on the invoice. Missing PO numbers are a common reason invoices get stuck.

Send invoices to the correct billing contact, not just your day-to-day project contact.

Use consistent invoice numbering and include the service period. AP teams often need these for matching.

Follow up politely before the due date. A friendly reminder can prevent an invoice from being forgotten.

Step 11: Avoid common hourly invoicing mistakes

Here are frequent issues that slow down payment or create disputes—and how to prevent them:

Vague descriptions: “Work on project” invites questions. Use specific tasks and outcomes.

No service period: Without dates, clients can’t easily reconcile charges. Always add a service period.

Inconsistent rounding: If you track by the minute but invoice by 0.25-hour increments (or vice versa), totals can look suspicious. Align your tracking and invoicing method.

Surprise charges: Billing for expenses or tasks the client didn’t expect is the fastest route to dispute. Get approvals upfront.

Too much detail or too little detail: If clients complain about either, adjust. The “right” detail level is the one that gets approved quickly and consistently.

Skipping due dates: “Net 15” without a due date can lead to misunderstandings, especially across time zones and holidays.

Step 12: What to do when a client questions hours

Even with clean invoices, questions happen. The best response is calm, factual, and fast. Treat questions as part of a professional process, not as an accusation.

A good approach:

1) Acknowledge quickly. “Thanks for checking—happy to clarify.”

2) Provide a time log summary. Share dates, tasks, and hours tied to the invoice lines.

3) Connect time to outcomes. If you can point to deliverables, tickets, commits, designs, or meeting notes, do it.

4) Offer a process improvement. If they want more detail next time, change your line item structure or attach a time report automatically.

If the client requests a reduction, decide based on relationship value and whether you contributed to the confusion. If you made the mistake (unclear scope, poor notes, billing something not agreed), consider adjusting. If you’re confident the invoice is correct, stand your ground respectfully and point back to the agreed terms.