Billable utilization calculator: utilization rate on available and contract hours
Enter contract hours, leave, sickness and billable hours to see utilization on contract hours and on the hours someone was actually available.
Short answer
Utilization rate = billable hours ÷ available hours × 100%. Available hours are contract hours minus holiday, public holidays and sickness. A consultant with 1,872 contract hours, 312 hours of leave and sickness and 1,105 billable hours is 1,105 ÷ 1,560 = 70.8% utilized. On contract hours that is 59.0%. Always say which hours you divide by.
Billable utilization calculator
Hours per person or per team, over the same period. From your timesheets and leave records.
- Available hours
- 1,560
- Utilization on contract hours
- 59.0%
- Utilization on available hours
- 70.8%
Utilization formulas
| Measure | Formula | Example |
|---|---|---|
| Available hours | contract hours − holiday and public holidays − sickness | 1,872 − 248 − 64 = 1,560 |
| Utilization on available hours | billable hours ÷ available hours × 100% | 1,105 ÷ 1,560 = 70.8% |
| Utilization on contract hours | billable hours ÷ contract hours × 100% | 1,105 ÷ 1,872 = 59.0% |
| Non-billable hours | hours logged − billable hours | meetings, sales, training, admin |
There is no official definition. Many firms call utilization on available hours simply the utilization rate. Others divide by contract hours, because leave and sickness are paid too. Both work, as long as reports and targets always use the same denominator.
Billable means you may invoice it to a client. Hours on a fixed-price project usually count, even when the project overruns. Utilization then looks high while the project margin does not.
What is a good utilization rate?
| Role | Rule of thumb on available hours |
|---|---|
| Consultant, developer, adviser | 70 to 85% |
| Senior with team responsibility | 50 to 70% |
| Partner or director | 20 to 50% |
| Support, sales and management | No utilization target |
These are rules of thumb from consulting, IT and engineering firms, not standards. A 100% target is not realistic: everyone needs time for meetings, training and admin. People who stay above 90% for long often do not log all their hours, or burn out. Look at the monthly trend and at the gap between logged and invoiced hours as well.
Worked example: a consultant on 36 hours
A fictional consultant works 36 hours a week. The calculator above starts with these hours for one year.
| Item | Hours |
|---|---|
| Contract hours: 36 × 52 | 1,872 |
| Holiday and public holidays | 248 |
| Sickness | 64 |
| Available hours | 1,560 |
| Billable hours | 1,105 |
| Utilization on available hours | 70.8% |
| Utilization on contract hours | 59.0% |
At a rate of 110 per hour, each percentage point of utilization on 1,560 available hours is 15.6 hours, or about 1,700 of revenue per person per year. For a team of ten, five points more is around 85,000 of extra revenue without hiring.
How to improve utilization
- Have everyone log hours daily. Hours filled in from memory on Friday afternoon are too low and too vague to invoice.
- Make non-billable work visible. Log internal work on separate codes so you can see whether it is meetings, sales or rework.
- Plan ahead. Low utilization often comes from gaps between projects. A six-week plan shows those gaps before they happen.
- Invoice what you log. Compare billable hours logged with hours invoiced. The difference is work you give away.
Getting the hours from your systems
Contract hours and leave sit in your HR or payroll system, logged and billable hours in your time tracking. In Simplicate every hour is marked billable or not; contract hours and leave often come from Nmbrs or another payroll package.
Connect those sources to DigiData and the HR dashboard shows utilization per person, team and month, next to absence and staffing. How firms combine it with project margin is on the professional services page.
Frequently asked questions
What is the difference between utilization and billability?
Many firms use the words interchangeably. Strictly, billability is the share of hours you can invoice, while utilization can include all project work, billable or not. Agree which definition your organisation uses.
Should I divide by contract hours or available hours?
Available hours show how productive someone was while they were there. Contract hours show what a person brings in against what they cost, including leave and sickness. Use available hours for personal targets and contract hours for the budget.
Does overtime count?
Yes, billable overtime counts as billable hours. On contract hours that can push utilization above 100%. Treat that as a sign to look at workload, not as a reason to raise the target.
How often should I measure utilization?
Monthly per person and per team, with a three-month rolling average. Weekly figures swing too much with holidays.
Utilization per team, updated every day
Connect your time tracking to DigiData and see utilization, absence and project margin without exports. 14 days free, cancel monthly.
See the HR dashboard