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Hourly invoice template: what it is
An invoice is the request for payment you send after supplying goods or services. It records what was supplied, at what price and tax, and when payment is due. Hours times rate, by day or task.
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Example: a filled hourly invoice
- The title says what the document is: an invoice.
- A unique number from a continuous series, allocated when you issue it.
- Your business name and address, and tax number if registered.
- Who it is for.
- Each line: description, quantity, rate and amount.
- Tax by rate.
- The total in the document's currency and format.
Worked example: the numbers behind the invoice above
| Item | Qty | Rate | Amount | Tax |
|---|---|---|---|---|
| Week of 6 October: checkout bug fixes and payment testing | 11.5 | $80.00 | $920.00 | $0.00 |
| Week of 13 October: catalogue import script | 8.25 | $80.00 | $660.00 | $0.00 |
| Out-of-hours deployment, 18 October (1.5x rate) | 2 | $120.00 | $240.00 | $0.00 |
| Subtotal | $1,820.00 | $0.00 | ||
| Total | $1,820.00 | |||
No tax is charged on these lines, so the total equals the value of the supply.
How to fill in the hourly invoice
- Enter your hourly rate on each line.
- Add a line per week or task with the hours worked.
- Use decimals for part hours: 1.25 for an hour and a quarter.
- Save it, and attach your detailed time log when you send it.
Minutes to decimal hours
| Minutes | Decimal hours |
|---|---|
| 6 | 0.1 |
| 15 | 0.25 |
| 20 | 0.33 |
| 30 | 0.5 |
| 40 | 0.67 |
| 45 | 0.75 |
Setting the rate
An hourly rate has to pay for the hours you cannot bill: admin, sales, holidays and sick days. Freelancers typically bill 60 to 70% of the hours they work. Divide your target income plus costs by your realistic billable hours, not by the 2,080 hours of a full-time year.
What to put on an invoice, field by field
| Field | What to enter |
|---|---|
| Document title | Say exactly what it is: "Invoice". The title tells the buyer and the tax authority how to treat it. |
| Number and date | A unique number in a continuous series and the issue date. LuckPanda allocates the number when you issue. |
| Your business | Name, address, and tax ID if your state or client needs it |
| Customer | Name, address, and tax ID if your state or client needs it |
| Lines | Description, quantity, unit and rate. Each line carries its own tax rate. |
| Tax | Sales tax where you must collect it, at the rate for the delivery address. |
| Totals | Taxable value, tax by component and the total, in the document currency. Amounts in words are customary in India. |
| Terms | Due date, bank or payment details and late-payment terms. |
United States rules for an invoice
- There is no federal invoice format. Include what your client's accounts payable needs to pay: your legal name, invoice number and date, what was supplied, amounts, due date and payment instructions.
- Sales tax is set by each state. Charge it only where you have nexus (a physical presence or, since 2018, economic nexus by sales volume) and the item is taxable; most services are exempt in many states.
- A business that pays a contractor $2,000 or more in a year (the threshold rose from $600 for payments made from 2026) reports it on Form 1099-NEC, so expect your client to ask for a W-9.
Mistakes to avoid
- Editing or deleting an issued invoice instead of issuing a credit note.
- Gaps or duplicates in the number series.
- Charging the wrong tax type (for India: IGST on an intra-state sale, or CGST and SGST across states).
- Leaving out the due date and payment details, which is the commonest reason invoices are paid late.
- Rounding each line's tax differently from the total; LuckPanda computes tax per line and keeps the components adding up.
Invoice vs other sales documents
| Document | When | Asks for payment | Tax document | In the books |
|---|---|---|---|---|
| Quotation / estimate | Before the order | No | No | No |
| Proforma invoice | After the order, before supply | Advance only | No | No |
| Invoice / tax invoice | On supply | Yes | Yes | Yes: sale and receivable |
| Receipt | When paid | No, confirms payment | No (receipt voucher for advances in India) | Yes: payment |
| Credit note | After an invoice, to reduce it | No, reduces what is owed | Yes | Yes: reverses part of the sale |
Questions people ask
How do I bill part hours?
Use decimal hours: 15 minutes is 0.25, 30 minutes 0.5, 45 minutes 0.75. Many people bill in 6-minute (0.1) or 15-minute increments; say which in your terms.
Can I show different rates for different work?
Yes, if your contract has them, such as a higher rate for urgent or out-of-hours work. Put each rate on its own line.
How much detail do clients want?
Most want hours by week or task on the invoice and the full log on request. Agencies and law firms often need task-level detail.