diff --git a/apps/time_entries/admin.py b/apps/time_entries/admin.py
new file mode 100644
index 0000000..3d2e6d6
--- /dev/null
+++ b/apps/time_entries/admin.py
@@ -0,0 +1,33 @@
+from django.contrib import admin
+
+from core.admins.base import BaseAdmin, SoftDeleteListFilter
+from apps.time_entries.models import TimeEntry
+
+
+@admin.register(TimeEntry)
+class TimeEntryAdmin(BaseAdmin):
+    list_display = (
+        "id",
+        "user",
+        "workspace",
+        "project",
+        "start_time",
+        "end_time",
+        "is_billable",
+    )
+    list_filter = (
+        SoftDeleteListFilter,
+        "workspace",
+        "project",
+        "is_billable",
+    )
+    search_fields = (
+        "user__mobile",
+        "project__name",
+        "description",
+    )
+    autocomplete_fields = (
+        "user",
+        "workspace",
+        "project",
+    )
diff --git a/apps/time_entries/api/serializers.py b/apps/time_entries/api/serializers.py
new file mode 100644
index 0000000..d13e6e8
--- /dev/null
+++ b/apps/time_entries/api/serializers.py
@@ -0,0 +1,78 @@
+from rest_framework import serializers
+
+from core.serializers.base import BaseModelSerializer
+from apps.time_entries.models import TimeEntry
+from apps.projects.models import Project
+from apps.tags.models import Tag
+
+
+class TimeEntrySerializer(BaseModelSerializer):
+    """
+    Output serializer for TimeEntry.
+    """
+    class Meta:
+        model = TimeEntry
+        fields = BaseModelSerializer.Meta.fields + (
+            "workspace",
+            "user",
+            "project",
+            "description",
+            "start_time",
+            "end_time",
+            "duration",
+            "tags",
+            "is_billable",
+            "hourly_rate",
+            "currency",
+        )
+        read_only_fields = fields
+
+
+class TimeEntryCreateSerializer(serializers.Serializer):
+    """
+    Validates input data for creating/starting a time entry.
+    """
+    workspace_id = serializers.UUIDField()
+    project_id = serializers.PrimaryKeyRelatedField(
+        queryset=Project.objects.filter(is_deleted=False), 
+        required=False, 
+        allow_null=True, 
+        source='project'
+    )
+    start_time = serializers.DateTimeField()
+    end_time = serializers.DateTimeField(required=False, allow_null=True)
+    description = serializers.CharField(required=False, allow_blank=True, default="")
+    tags = serializers.PrimaryKeyRelatedField(
+        queryset=Tag.objects.filter(is_deleted=False), 
+        many=True, 
+        required=False
+    )
+    is_billable = serializers.BooleanField(default=False)
+
+
+class TimeEntryUpdateSerializer(serializers.Serializer):
+    """
+    Validates input data for updating an existing time entry.
+    """
+    project_id = serializers.PrimaryKeyRelatedField(
+        queryset=Project.objects.filter(is_deleted=False), 
+        required=False, 
+        allow_null=True, 
+        source='project'
+    )
+    start_time = serializers.DateTimeField(required=False)
+    end_time = serializers.DateTimeField(required=False, allow_null=True)
+    description = serializers.CharField(required=False, allow_blank=True)
+    tags = serializers.PrimaryKeyRelatedField(
+        queryset=Tag.objects.filter(is_deleted=False), 
+        many=True, 
+        required=False
+    )
+    is_billable = serializers.BooleanField(required=False)
+
+
+class TimeEntryStopSerializer(serializers.Serializer):
+    """
+    Optional specific serializer for stopping a timer manually.
+    """
+    end_time = serializers.DateTimeField(required=False, allow_null=True)
diff --git a/apps/time_entries/api/urls.py b/apps/time_entries/api/urls.py
new file mode 100644
index 0000000..2de9df5
--- /dev/null
+++ b/apps/time_entries/api/urls.py
@@ -0,0 +1,13 @@
+from django.urls import path, include
+from rest_framework.routers import DefaultRouter
+
+from apps.time_entries.api.views import TimeEntryViewSet
+
+app_name = "time_entries"
+
+router = DefaultRouter()
+router.register(r"time-entries", TimeEntryViewSet, basename="time-entry")
+
+urlpatterns = [
+    path("", include(router.urls)),
+]
diff --git a/apps/time_entries/api/views.py b/apps/time_entries/api/views.py
new file mode 100644
index 0000000..835c5e7
--- /dev/null
+++ b/apps/time_entries/api/views.py
@@ -0,0 +1,113 @@
+from rest_framework import status
+from rest_framework.viewsets import ModelViewSet
+from rest_framework.decorators import action
+from rest_framework.response import Response
+from rest_framework.permissions import IsAuthenticated
+from rest_framework.filters import SearchFilter, OrderingFilter
+from django_filters.rest_framework import DjangoFilterBackend
+
+from core.paginations.limit_offset import CustomLimitOffsetPagination
+
+from apps.time_entries.models import TimeEntry
+from apps.time_entries.api.serializers import (
+    TimeEntrySerializer,
+    TimeEntryCreateSerializer,
+    TimeEntryUpdateSerializer,
+    TimeEntryStopSerializer
+)
+from apps.time_entries.services.time_entries import (
+    create_time_entry,
+    update_time_entry,
+    stop_time_entry
+)
+
+
+class TimeEntryViewSet(ModelViewSet):
+    """
+    API endpoints for managing time entries.
+    """
+    pagination_class = CustomLimitOffsetPagination
+    permission_classes = [IsAuthenticated]
+    
+    filter_backends = [DjangoFilterBackend, SearchFilter, OrderingFilter]
+    filterset_fields = ["workspace", "project", "is_billable"]
+    search_fields = ["description", "project__name", "tags__name"]
+    ordering_fields = ["start_time", "end_time", "created_at", "updated_at"]
+    ordering = ["-start_time"]
+
+    def get_queryset(self):
+        """
+        Users can only interact with their own time entries within workspaces 
+        where they hold an active membership.
+        """
+        if getattr(self, "swagger_fake_view", False) or not self.request.user.is_authenticated:
+            return TimeEntry.objects.none()
+
+        return TimeEntry.objects.filter(
+            user=self.request.user,
+            workspace__memberships__user=self.request.user,
+            workspace__memberships__is_active=True,
+            is_deleted=False
+        ).distinct()
+
+    def get_serializer_class(self):
+        if self.action == "create":
+            return TimeEntryCreateSerializer
+        elif self.action in ["update", "partial_update"]:
+            return TimeEntryUpdateSerializer
+        elif self.action == "stop":
+            return TimeEntryStopSerializer
+        return TimeEntrySerializer
+
+    def create(self, request, *args, **kwargs):
+        serializer = self.get_serializer(data=request.data)
+        serializer.is_valid(raise_exception=True)
+        
+        entry = create_time_entry(
+            user=request.user,
+            workspace_id=serializer.validated_data.pop("workspace_id"),
+            **serializer.validated_data
+        )
+        
+        output_serializer = TimeEntrySerializer(entry)
+        return Response(output_serializer.data, status=status.HTTP_201_CREATED)
+
+    def update(self, request, *args, **kwargs):
+        partial = kwargs.pop("partial", False)
+        entry = self.get_object()
+        
+        serializer = self.get_serializer(data=request.data, partial=partial)
+        serializer.is_valid(raise_exception=True)
+        
+        updated_entry = update_time_entry(
+            entry=entry,
+            **serializer.validated_data
+        )
+        
+        output_serializer = TimeEntrySerializer(updated_entry)
+        return Response(output_serializer.data, status=status.HTTP_200_OK)
+
+    @action(detail=True, methods=["post"])
+    def stop(self, request, pk=None):
+        """
+        Dedicated endpoint to stop an actively running timer.
+        """
+        entry = self.get_object()
+        
+        serializer = self.get_serializer(data=request.data)
+        serializer.is_valid(raise_exception=True)
+        
+        end_time = serializer.validated_data.get("end_time")
+        stopped_entry = stop_time_entry(entry, end_time=end_time)
+        
+        output_serializer = TimeEntrySerializer(stopped_entry)
+        return Response(output_serializer.data, status=status.HTTP_200_OK)
+
+    def destroy(self, request, *args, **kwargs):
+        """
+        Soft deletes the time entry.
+        """
+        entry = self.get_object()
+        entry.is_deleted = True
+        entry.save(update_fields=["is_deleted", "updated_at"])
+        return Response(status=status.HTTP_204_NO_CONTENT)
diff --git a/apps/time_entries/apps.py b/apps/time_entries/apps.py
new file mode 100644
index 0000000..e00ce74
--- /dev/null
+++ b/apps/time_entries/apps.py
@@ -0,0 +1,7 @@
+from django.apps import AppConfig
+
+
+class TimeEntriesConfig(AppConfig):
+    default_auto_field = "django.db.models.BigAutoField"
+    name = "apps.time_entries"
+    verbose_name = "Time Entries"
diff --git a/apps/time_entries/migrations/__init__.py b/apps/time_entries/migrations/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/apps/time_entries/models.py b/apps/time_entries/models.py
new file mode 100644
index 0000000..6d25f6b
--- /dev/null
+++ b/apps/time_entries/models.py
@@ -0,0 +1,81 @@
+from django.core.exceptions import ValidationError
+from django.conf import settings
+from django.db import models
+from django.db.models import Q
+
+from core.models.base import BaseModel
+from apps.workspaces.models import Workspace
+from apps.projects.models import Project
+from apps.tags.models import Tag
+
+
+User = settings.AUTH_USER_MODEL
+
+
+class TimeEntry(BaseModel):
+    workspace = models.ForeignKey(
+        Workspace,
+        on_delete=models.CASCADE,
+        related_name="time_entries",
+    )
+    user = models.ForeignKey(
+        User,
+        on_delete=models.CASCADE,
+        related_name="time_entries",
+    )
+    project = models.ForeignKey(
+        Project,
+        on_delete=models.SET_NULL,
+        null=True,
+        blank=True,
+        related_name="time_entries",
+    )
+    description = models.TextField(blank=True)
+    start_time = models.DateTimeField()
+    end_time = models.DateTimeField(null=True, blank=True)
+    duration = models.DurationField(null=True, blank=True)
+    tags = models.ManyToManyField(
+        Tag,
+        blank=True,
+        related_name="time_entries",
+    )
+    is_billable = models.BooleanField(default=False)
+    hourly_rate = models.DecimalField(
+        max_digits=10,
+        decimal_places=2,
+        null=True,
+        blank=True,
+    )
+    currency = models.CharField(
+        max_length=3,
+        default="USD",
+    )
+
+    class Meta:
+        db_table = "time_entry"
+        ordering = ("-updated_at", "-created_at")
+        indexes = [
+            models.Index(fields=["workspace"], name="time_entry_workspace_idx"),
+            models.Index(fields=["user"], name="time_entry_user_idx"),
+            models.Index(fields=["project"], name="time_entry_project_idx"),
+            models.Index(fields=["start_time"], name="time_entry_start_idx"),
+            models.Index(fields=["workspace", "start_time"], name="time_entry_workspace_start_idx"),
+        ]
+        constraints = [
+            models.UniqueConstraint(
+                fields=["workspace", "user"],
+                condition=Q(end_time__isnull=True, is_deleted=False),
+                name="unique_running_timer_per_user",
+            )
+        ]
+
+    def __str__(self):
+        return f"{self.user} - {self.start_time}"
+
+    def clean(self):
+        if self.project and self.project.workspace_id != self.workspace_id:
+            raise ValidationError("Project must belong to the same workspace.")
+
+        for tag in self.tags.all():
+            if tag.workspace_id != self.workspace_id:
+                raise ValidationError("Tags must belong to the same workspace.")
diff --git a/apps/time_entries/services/rates.py b/apps/time_entries/services/rates.py
new file mode 100644
index 0000000..73b4bf3
--- /dev/null
+++ b/apps/time_entries/services/rates.py
@@ -0,0 +1,22 @@
+from apps.projects.models import ProjectRate, ProjectUserRate
+
+
+def resolve_rate(user, project):
+    user_rate = ProjectUserRate.objects.filter(
+        user=user,
+        project=project,
+        is_active=True,
+    ).order_by("-effective_from").first()
+
+    if user_rate:
+        return user_rate.hourly_rate, user_rate.currency
+
+    project_rate = ProjectRate.objects.filter(
+        project=project,
+        is_active=True,
+    ).order_by("-effective_from").first()
+
+    if project_rate:
+        return project_rate.hourly_rate, project_rate.currency
+
+    return None, "USD"
diff --git a/apps/time_entries/services/time_entries.py b/apps/time_entries/services/time_entries.py
new file mode 100644
index 0000000..3aac920
--- /dev/null
+++ b/apps/time_entries/services/time_entries.py
@@ -0,0 +1,141 @@
+
+from django.utils import timezone
+from rest_framework.exceptions import ValidationError, PermissionDenied
+
+from apps.time_entries.models import TimeEntry
+from apps.time_entries.services.rates import resolve_rate
+from apps.workspaces.models import WorkspaceMembership
+
+
+def _verify_workspace_access(user, workspace_id):
+    """
+    Ensures the user is an active member of the specified workspace.
+    """
+    has_access = WorkspaceMembership.objects.filter(
+        workspace_id=workspace_id,
+        user=user,
+        is_active=True,
+        is_deleted=False
+    ).exists()
+    
+    if not has_access:
+        raise PermissionDenied("You do not have access to this workspace.")
+
+
+def create_time_entry(user, workspace_id, start_time, end_time=None, project=None, tags=None, description="", is_billable=False):
+    """
+    Creates a new time entry. If end_time is None, it acts as a running timer.
+    """
+    _verify_workspace_access(user, workspace_id)
+
+    if not end_time:
+        has_running_timer = TimeEntry.objects.filter(
+            workspace_id=workspace_id, 
+            user=user, 
+            end_time__isnull=True, 
+            is_deleted=False
+        ).exists()
+        if has_running_timer:
+            raise ValidationError({"non_field_errors": "You already have a running timer in this workspace."})
+
+    if start_time and end_time and start_time >= end_time:
+        raise ValidationError({"end_time": "End time must be strictly after start time."})
+
+    if project and project.workspace_id != workspace_id:
+        raise ValidationError({"project": "Project must belong to the same workspace."})
+
+    duration = (end_time - start_time) if end_time else None
+
+    hourly_rate, currency = None, "USD"
+    if is_billable and project:
+        hourly_rate, currency = resolve_rate(user, project)
+
+    entry = TimeEntry.objects.create(
+        workspace_id=workspace_id,
+        user=user,
+        project=project,
+        description=description,
+        start_time=start_time,
+        end_time=end_time,
+        duration=duration,
+        is_billable=is_billable,
+        hourly_rate=hourly_rate,
+        currency=currency
+    )
+
+    if tags:
+        for tag in tags:
+            if tag.workspace_id != workspace_id:
+                raise ValidationError({"tags": f"Tag '{tag.name}' does not belong to the workspace."})
+        entry.tags.set(tags)
+
+    return entry
+
+
+def update_time_entry(entry, **kwargs):
+    """
+    Updates an existing time entry, recalculating duration and rates if necessary.
+    """
+    # Verify Project Workspace if changing
+    project = kwargs.get("project", entry.project)
+    if project and project.workspace_id != entry.workspace_id:
+        raise ValidationError({"project": "Project must belong to the same workspace."})
+    
+    start_time = kwargs.get("start_time", entry.start_time)
+    end_time = kwargs.get("end_time", entry.end_time)
+    
+    # Check if attempting to resume a timer (setting end_time to null)
+    if "end_time" in kwargs and end_time is None and entry.end_time is not None:
+        has_running_timer = TimeEntry.objects.filter(
+            workspace_id=entry.workspace_id, 
+            user=entry.user, 
+            end_time__isnull=True, 
+            is_deleted=False
+        ).exclude(id=entry.id).exists()
+        if has_running_timer:
+            raise ValidationError({"non_field_errors": "You already have a running timer in this workspace."})
+
+    if start_time and end_time and start_time >= end_time:
+        raise ValidationError({"end_time": "End time must be strictly after start time."})
+
+    kwargs["duration"] = (end_time - start_time) if end_time else None
+
+    # Recalculate rates if billing status or project changes
+    is_billable = kwargs.get("is_billable", entry.is_billable)
+    if "project" in kwargs or "is_billable" in kwargs:
+        if is_billable and project:
+            kwargs["hourly_rate"], kwargs["currency"] = resolve_rate(entry.user, project)
+        else:
+            kwargs["hourly_rate"] = None
+
+    tags = kwargs.pop("tags", None)
+    update_fields = []
+
+    for field, value in kwargs.items():
+        if hasattr(entry, field) and getattr(entry, field) != value:
+            setattr(entry, field, value)
+            update_fields.append(field)
+            
+    if update_fields:
+        update_fields.append("updated_at")
+        entry.save(update_fields=update_fields)
+
+    # Handle tags update
+    if tags is not None:
+        for tag in tags:
+            if tag.workspace_id != entry.workspace_id:
+                raise ValidationError({"tags": f"Tag '{tag.name}' does not belong to the workspace."})
+        entry.tags.set(tags)
+    
+    return entry
+
+
+def stop_time_entry(entry, end_time=None):
+    """
+    Helper function specifically for stopping an active timer.
+    """
+    if entry.end_time is not None:
+        raise ValidationError({"non_field_errors": "This time entry is already stopped."})
+        
+    stop_time = end_time or timezone.now()
+    return update_time_entry(entry, end_time=stop_time)
diff --git a/config/settings/base.py b/config/settings/base.py
index 2eb501b..0738ae6 100644
--- a/config/settings/base.py
+++ b/config/settings/base.py
@@ -44,6 +44,7 @@ LOCAL_APPS = [
     "apps.clients",
     "apps.projects",
     "apps.tags",
+    "apps.time_entries",
 ]
 
 INSTALLED_APPS = DJANGO_APPS + THIRD_PARTY_APPS + LOCAL_APPS
diff --git a/config/urls.py b/config/urls.py
index 1f53109..bb94a9e 100644
--- a/config/urls.py
+++ b/config/urls.py
@@ -20,6 +20,7 @@ urlpatterns = [
     path('api/', include('apps.clients.api.urls'), name="clients"),
     path('api/', include('apps.projects.api.urls'), name="projects"),
     path('api/', include('apps.tags.api.urls'), name="tags"),
+    path('api/', include('apps.time_entries.api.urls'), name="time_entries"),
 ]
 
 if settings.DEBUG: