Hourly Rate Invoice Template Canada — Time & Materials Billing
Hourly billing is the most straightforward invoicing model for Canadian freelancers — you track your time, multiply by your rate, and invoice for the total. But there are several details that make the difference between a professional invoice and a confusing one: how you document hours, how you handle partial hours, how you add expenses, and how GST/HST applies to the total.
How to Bill by the Hour
A well-structured hourly invoice does three things: it shows the hours worked, explains what those hours were for, and calculates the total clearly. The basic formula is:
Hours × Rate = Subtotal
Subtotal + Expenses = Pre-Tax Total
Pre-Tax Total × GST/HST rate = Tax
Pre-Tax Total + Tax = Invoice TotalTime Tracking Best Practices
Before you can invoice, you need to track your time accurately. Best practices for Canadian freelancers:
- Log time daily — do not try to remember hours at the end of the week. Use a simple spreadsheet, a notes app, or a time tracking tool.
- Log by task, not by day — break your time into meaningful task descriptions that you can use directly on your invoice (e.g., "Homepage redesign — mobile responsive layout" not just "web work")
- Round to the nearest 15 minutes — this is the most common convention. See the section on rounding below.
- Save your logs — the CRA recommends keeping business records for at least 6 years. Your time logs are business records.
Example: 7.5-Hour Web Development Invoice (Ontario)
| Description | Hours | Rate | Amount |
|---|---|---|---|
| Homepage redesign — mobile-first responsive layout (React) | 3.0 | $120.00 | $360.00 |
| Contact form — backend API integration & validation | 2.25 | $120.00 | $270.00 |
| Performance audit — Lighthouse fixes, image optimisation | 1.5 | $120.00 | $180.00 |
| Client call — scope review & Q&A | 0.75 | $120.00 | $90.00 |
| Domain renewal reimbursement (Namecheap receipt attached) | — | — | $22.99 |
| Subtotal (7.5 hrs @ $120.00 + expenses) | 7.5 | $922.99 | |
| HST 13% (BN: 223344556 RT0001) | $119.99 | ||
| Total Due — Due March 24, 2026 | $1,042.98 | ||
Rounding Policies for Partial Hours
The most common rounding conventions are:
- 15-minute increments: round to the nearest quarter hour (0.25 hr). Most common for professional services.
- 30-minute increments: round to the nearest half hour. Common for trades and some technical services.
- No rounding / exact time: some clients prefer exact minutes converted to decimal hours (e.g., 47 minutes = 0.78 hrs). This requires accurate time tracking tools.
Whatever policy you use, state it clearly in your contract so there are no disputes on invoices. A simple note: "Time is billed in 15-minute increments, rounded up to the nearest quarter hour."
Adding Expenses to Hourly Invoices
Reimbursable expenses — software licences, materials, travel, domain registrations — should be listed as separate line items, not folded into your hourly rate. This makes the invoice transparent and helps your client's accounting team categorise costs correctly. Always attach receipts (scanned PDFs or photos) for any expense over $50.
GST/HST on Hourly Invoices
Once registered for GST/HST, apply the appropriate rate to the total of your services and expenses combined. Both your time and your reimbursed expenses are generally taxable. Show HST as a separate line with your Business Number (BN).
Related Templates
- Simple Invoice Template — for freelancers under the $30,000 threshold
- Project-Based Invoice Template — fixed-fee alternative to hourly billing
- Consultant Invoice Template — hourly + expenses for corporate consultants
- Canadian Freelance Invoice Template