Jira stores no billable status. A worklog carries the author, the start date, the duration, and a comment. The time tracking settings offer no billing option. Your team must define its own billing rule, record the exceptions against it, and report the split.
This article uses one fictional 40-hour week to show one rule, one exception, and both totals.
Write the billing rule down first
A billing rule says which time a client pays for. Decide it before the week starts. A rule invented at invoice time becomes an argument.
A rule needs three parts. It names the projects that carry billable time, the categories that do not, and the exceptions to both. Write the parts where the whole team sees them.
For example, this rule comes from the fictional studio in the sample below. Time on the client projects BOLD and FIR is billable at each client's rate. Time in the internal project OPS is not billable. One exception exists. Rework that our own defect causes stays on the client project, and it carries a "no" billing mark.
Under this exception, the lost hours stay with the client work. The invoice for BOLD stays correct, and the cost of the defect stays visible in the same report.
Three ways to record the split
A separate internal project needs the least discipline. Every non-billable category lives there, so each entry inherits its project's status. Nobody decides per entry, and no one can label a client hour as internal by mistake. Daylight's setup uses this structure.
Labels or components on client issues give more detail on the invoice. One forgotten label turns a non-billable meeting into a client charge.
A per-entry billing mark is the third method. A timesheet app stores the mark beside each entry, so client and internal time can sit on the same report. The mark survives issue moves and project reorganization.
Pick one method. If you run two methods at once, the totals will disagree, and you will lose time to the difference.
Report three totals, not one
Logged hours, billable hours, and non-billable hours answer different questions. A 40-hour week with 30 billable hours and 10 internal hours is a full week and a slow month. If the internal share grows without a reason, the 10 hours need a second look.
The non-billable hours on a client project deserve their own line. In a report with one total, that number is invisible.
The fictional sample week
Download the sample CSV. Sam Ortiz is a fictional person. The projects BOLD, FIR, and OPS are fictional. The week runs Monday, October 19, to Friday, October 23, 2026, in America/Edmonton.
| Issue | Summary | Hours | Billable | Billable hours | Cost (USD) |
|---|---|---|---|---|---|
| BOLD-12 | Design checkout | 8 | yes | 8 | 800.00 |
| BOLD-15 | Build checkout API | 8 | yes | 8 | 800.00 |
| BOLD-21 | Rework after our own defect | 2 | no | 0 | 200.00 |
| BOLD-22 | Build checkout API | 6 | yes | 6 | 600.00 |
| FIR-3 | Contract review | 8 | yes | 8 | 960.00 |
| OPS-3 | Internal meetings | 2 | no | 0 | 160.00 |
| OPS-4 | Training | 6 | no | 0 | 480.00 |
| Total | 40 | 30 | 4000.00 |
The rule produces these numbers. Client hours total 32, of which 30 are billable. Internal hours total 8. The write-off is the 2-hour rework row at 200.00. Its cost stays, because the studio paid for the work even though the client did not.
Check a split like this before an invoice goes out:
- The billable hours on each client row equal the row hours under a "yes" mark.
- The internal rows carry no billable hours at all.
- Every exception has a rule behind it, named in a note or the rule sheet.
- The row hours add to the week's total.
How Daylight handles the same split
Daylight marks time in the internal project as never billable, whatever the project settings say. An admin can also set the billable flag per project and correct one entry with a per-entry override in the timesheet. The reports guide lists the Billable and Billable hours columns in the CSV export. The sample CSV above follows that format.
The same report carries rates and costs, so the write-off shows a currency value. Daylight does not create or send an invoice from the export.
This walkthrough uses Atlassian's published documentation and Daylight's help pages and product source, reviewed on October 24, 2026. It does not report a live Jira trial or a customer result.
Inspect the sample report to see a completed week in the report format.