Billable Utilization Calculator
Billable utilization is the share of your team’s available hours that gets billed to clients — the operating lever behind agency margin. Enter the hours billed and the team’s capacity to see your utilization, how far it sits from target, and the revenue in that gap.
Utilization is one division the denominator is the argument
Everyone agrees on the billable hours. Where agencies differ, and where the number quietly drifts, is what counts as an available hour and what a healthy target is for each role.
Available hours, not paid hours
Contracted hours minus holidays, public holidays and sick leave is the honest denominator. Take out internal meetings, pitches and admin as well and everyone looks 90% utilized — and the time you were trying to see disappears from the report.
One target doesn’t fit every role
A mid-weight designer at 80% and a creative director at 45% can both be doing their jobs. Set targets by role and compare people against their own, or an agency-wide average pushes the wrong people to bill more.
Busy is not the same as profitable
Hours logged to a client only become revenue once they are invoiced and paid. Read utilization next to realisation and effective rate, or a fully booked team can still be losing money to write-offs and unbilled scope.
Calculate your billable utilization
Enter billable hours and your team’s capacity for the period. Add a target and an hourly rate to price the gap.
Hours billed (or billable) to clients across the team in the period.
People whose time is sold to clients. Run leadership and support roles separately.
Contracted hours per person in a normal week.
4 for a month, 13 for a quarter, 52 for a year.
Holidays, public holidays and sick leave in the period. Leave meetings and admin in.
Optional. The utilization you plan and price around.
Optional. Your blended billing rate, used to price the gap to target.
Waiting for input
Enter billable hours, team size, hours per week and weeks in the period to see your utilization.
Utilization = billable hours ÷ available hours × 100. Available hours = people × hours per week × weeks − time off.
What is billable utilization?
Billable utilization is the percentage of a person’s or a team’s available hours spent on work that is billed to a client. If a senior designer is available for 1,800 hours a year and bills 1,260 of them, their utilization is 70%.
For an agency it is the operating lever behind margin. Salaries are paid on every available hour, but revenue only arrives on the billable ones, so a few points of utilization across a team is often the difference between a profitable year and a flat one.
Most agencies aim for 60–75% for billable staff, with leadership and craft directors lower. Pushing above 80% for long tends to mean burnout, scope creep that isn’t being billed, or no time left for sales and craft.
Available hours
Available hours = People × Hours per week × Weeks − Time off
10 people × 40 h × 4 weeks − (10 × 8 h time off) = 1,520 available hours
Billable utilization
Utilization = Billable hours ÷ Available hours × 100
1,000 billable hours ÷ 1,520 available × 100 = 65.8%
Gap to target
Gap = (Target % × Available hours) − Billable hours
70% × 1,520 = 1,064 target hours − 1,000 billed = 64 hours short
Revenue impact
Revenue impact = Gap hours × Average hourly rate
64 hours × $150 = $9,600 not billed in the period
How to use this billable utilization calculator
Pick a period, describe the team, and enter what was billed.
Choose the period and the team
Use a month (4 weeks), a quarter (13) or a year (52), and count only the people whose time is sold to clients. Run it again per role or team — an agency-wide figure averages away the signal.
Take out time off, leave in the admin
Subtract holidays, public holidays and sick leave per person. Internal meetings, pitches and admin stay in the denominator: they are the non-billable time utilization exists to show.
Set a target and price the gap
Enter your target utilization and average hourly rate to see how many billable hours separate you from it, how many that is per person, and what those hours are worth at your rate.
Billable utilization questions
Still stuck? and we’ll go through your numbers together.
What is a good billable utilization rate for an agency?
Most agencies aim for 60–75% across a year for billable staff, with juniors and mid-weights at the top of that range and leadership, creative directors and new-business roles well below it. Sustained utilization above 80% tends to mean overtime, scope creep nobody is billing, or no time left for sales and craft — so the right target is the one each role can hold for a whole year, not a single busy month.
How do you calculate available hours?
Multiply each person’s contracted hours per week by the weeks in the period, then subtract holidays, public holidays and sick leave. Someone on 40 hours a week has 2,080 contracted hours a year; after 25 days of holiday and 8 public holidays (264 hours) that leaves 1,816 available hours. Don’t subtract meetings or admin — they belong in the non-billable share.
What is the difference between utilization and realisation?
Utilization measures how much available time went on billable work. Realisation measures how much of that billable time was actually invoiced and paid. A team at 75% utilization with 85% realisation is writing off 15% of its billable hours, so the share of its time that produced revenue is closer to 64%.
Should non-billable work count against utilization?
Yes — that is what the measure is for. New-business pitches, internal projects, training and admin are all necessary, but they are paid for out of the margin on billable hours. Tracking them as non-billable shows how much of the team’s time the agency is investing, so you can decide whether that investment is deliberate.
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