The billable or non-billable status of time entries depends on many factors.
The billability of time entries first depends on how the activity items are set up. If an activity is billable, it will come up as billable in time entry. It can, however, be changed while entering time.
The second factor can be the project's contract type. Marketing and Overhead project types always have time entries marked as non-billable as they are considered internal projects.
Then the amount spent from the contract amount of a Fixed or Hourly Not to Exceed project triggers a time entry evaluation wherein anything above the contract is tagged as non-billable. Again, this can be overwritten and changed to billable, if required.