Utilization Rate Calculator

How it is calculated

Utilization is the part of the time you could work that was actually billed: utilization rate = billable_hours ÷ available_hours × 100. The tool also shows non-billable hours, available_hours − billable_hours, rounded to whole hours. Both fields cover the same person (or team) and the same period. Available hours are the hours the person was scheduled and able to work, so decide in advance whether holidays and paid leave are removed from them, because that choice changes the result. Billable hours must not exceed available hours, so a rate above 100% is rejected with no result. Available hours must be above zero and nothing can be negative. Billable means time charged to a client, not time that was merely spent on client work.

Common mistakes

• Using all hours in a calendar year (8760) or paid hours with leave included as available hours. Decide whether holidays and vacation count, and keep that rule the same every month.
• Counting time spent on a client project that was not invoiced, such as unpaid revisions, as billable. Billable hours are the ones charged.
• Comparing a part-time person's billable hours with a full-time availability figure. Use each person's own available hours.
• Mixing periods, for example a month's billable hours against a year's available hours.
• Aiming for 100%. It leaves no time for admin, training or sales, and the tool will accept 100% even though it is rarely sustainable.