Utilization Rate Calculator
Enter your numbers to calculate utilization and compare modeled billable value at a target you choose. This is a planning scenario, not a revenue or profit forecast.
Your team
Your utilization rate
Review allocation, non-billable work and demand for the same people and period before deciding what to change.
What if you hit…
75%75% is an editable example, not a universal benchmark. Keep room for non-billable work and leave.
Current modeled billable value
$84,000
560 hrs × $150/hr
Billable value at 75%
$90,000
600 hrs × $150/hr
Additional billable value
+$6,000
if demand, delivery and billing support 75%
Use weekly hours for the same people and period, subtracting leave from available hours. This scenario assumes billable hours realize the stated rate and excludes costs, discounts, write-offs and taxes. Planned hours are not recorded actuals; fixed-fee revenue may not rise when hours rise.
Email me these results
We’ll email your selected numbers and assumptions. Useful for sharing with ops or a co-founder.
What your number actually means
Interpret utilization against a target chosen for your roles and service model. Review the ratio alongside demand, workload and project economics.
Review capacity
Review demand, allocation and internal responsibilities before deciding whether additional billable work is appropriate.
Check the buffer
Check delivery quality, internal responsibilities and project economics. Matching your target alone does not prove profitability or sustainable workload.
Review workload
Review the duration of the workload, upcoming leave and commitments by role. Agree how to adjust the plan if it exceeds sustainable delivery capacity.
Before hiring: Review sustained demand, workload by role, delivery quality, project margins, cash and hiring lead time together. Confirm the work and skills you need before treating utilization as a hiring decision.
Capacity planning guide →How the utilization rate is calculated
Utilization rate = (Billable hours ÷ Available hours) × 100
Run this per person, per team, and for the whole agency. Each level tells a different story.
Use billable-eligible hours and available hours for the same people and period. Subtract leave and holidays from contracted hours consistently. Keep internal meetings, management, sales and training visible without deducting them twice.
Example — 30 billable hours
A designer has 40 available hours. She bills 30 hours to clients.
(30 ÷ 40) × 100 = 75%
The ratio alone does not establish profitability or sustainable workload.
Example — 22 billable hours
A developer has 40 available hours. He bills 22 hours to clients.
(22 ÷ 40) × 100 = 55%
Below target
When individual numbers vary widely — one person at 50%, another at 95% — the agency average can look fine while two people have the opposite problem. Track per person, not just totals.
Workload management guide →What to do if your utilization rate is off
A single data point doesn’t tell you what to fix. Here’s where to look first, depending on where you fall.
If you are below your target
Audit non-billable time before assuming it’s a pipeline problem. Internal meetings, admin overhead, and unbilled pitch work are usually the biggest drains. Then look at how work is distributed — some people may be under-scheduled while others are close to capacity.
Resource planning →If you are above your target
Check whether leave and holidays are excluded consistently. Review demand, role mix, pricing, costs and delivery quality before deciding to hire or accept more work.
Frequently asked questions
What is a healthy utilization rate for an agency?
- Choose a billable utilization target that reflects roles, service model, internal responsibilities and sustainable delivery. A percentage alone does not establish profitability or team health. The calculator starts at 75% as an editable example.See the full capacity guide→
How do you calculate agency utilization rate?
- Utilization rate = (billable hours ÷ available hours) × 100. If someone has 40 hours available and bills 28, they’re at 70%. For a whole team, add up all billable hours and divide by total available hours across everyone.
What is the difference between billable hours and available hours?
- Use contracted working hours minus leave and holidays for the same period. Billable hours are hours eligible for client billing under your contract. Keep internal work visible and avoid subtracting it twice.
Why is my agency’s utilization rate so low?
- Check whether the gap reflects demand, role mix, internal responsibilities, leave definitions or missing records. Compare the same people and period before changing the plan.Workload guide→
How can I improve my team’s utilization rate?
- Review available capacity, demand and work distribution. Keep non-billable responsibilities visible, review scope and rates, and choose targets that fit the role and service model.
Do I need timesheets to track utilization rate?
- Plan capacity from allocated hours and available time. Projected financials use configured revenue and costs; compare recorded actuals where available.
When should I hire based on utilization rate?
- Review sustained demand, workload by role, delivery quality, project margins, cash and hiring lead time together. Confirm the work and skills you need before treating utilization as a hiring decision.Resource planning guide→
Plan utilization from staffing allocations
Plan capacity from allocated hours and available time. Projected financials use configured revenue and costs; compare recorded actuals where available.