Billable utilisation = billable hours ÷ available hours × 100
- Billable hours
- Time expected to be chargeable under the selected service and period (hours) — time records or labelled planning assumption
- Available hours
- Working time after consistently removing unavailable time (hours) — time budget and labelled planning assumption
- Billable utilisation
- Share of available time planned as billable (percentage) — calculated scenario
Some businesses use paid hours or total calendar capacity as the denominator. Label the chosen definition and do not compare unlike measures.
Define the denominator before choosing a feasible rate
| Checkpoint | What to record | Test before proceeding |
|---|---|---|
| Time base | Person or team, period and starting working hours | The basis is explicit and comparable with the billable-hours numerator. |
| Unavailable time | Leave, closures and other time outside working capacity | Each removal appears once and the remaining available hours stay non-negative. |
| Necessary non-billable work | Administration, sales, training and internal coordination | The operating work remains visible rather than being relabelled as billable. |
| Planned billable work | Customer-delivery hours supported by the remaining capacity | Billable hours do not exceed available hours after required work is allowed for. |
| Selected recovery requirement | The cost or revenue requirement used in the connected rate scenario | The implied workload and rate are both operationally feasible; otherwise revise the scenario. |
Build necessary non-billable work into the assumption
- Choose the person or team, planning period and working-time basis.
- Remove leave, closures and other time that is unavailable for work.
- List required non-billable activities such as administration, sales, training and internal coordination.
- Estimate billable delivery time without exceeding the remaining capacity.
- Calculate utilisation and test lower, base and higher cases.
- Compare the assumption with actual time records at the end of the period.
Worked time-budget waterfall
The figures are user-labelled assumptions for one planning period; they are not a benchmark.
| Time-budget step | Hours | Remaining capacity |
|---|---|---|
| Starting working-time assumption | 2,000 | 2,000 |
| Unavailable time | −200 | 1,800 |
| Administration and internal work | −360 | 1,440 |
| Sales and development time | −240 | 1,200 |
| Planned billable delivery | 1,080 | 120 unallocated |
Compare lower, base and higher cases before relying on one rate
| Case | Assumption to vary | Feasibility question |
|---|---|---|
| Lower | Fewer billable hours within the same labelled time base | Can the selected recovery requirement still be met at a credible rate and workload? |
| Base | The current planning estimate for billable and non-billable work | Do the time budget, expected demand and connected rate scenario reconcile? |
| Higher | More billable hours without hiding required operating work | Can delivery, sales, administration and review work all still be completed? |
Review actual against planned and avoid denominator errors
Before using the percentage
- The period, people and hour basis are labelled. (not complete)
- Unavailable time is removed once and only once. (not complete)
- Sales, administration, training and internal work remain visible. (not complete)
- Part-time or role-specific capacity is not averaged away without explanation. (not complete)
- A quieter-demand case is tested separately from available capacity. (not complete)
- The review date and actual-time source are recorded. (not complete)
Related tools
- Billable Utilisation Planner
Turn available time into realistic billable capacity
- Service Rate & Quote Planner
Set a viable rate and project quote
- Agency Team Capacity & Revenue Planner
Compare team billable and revenue capacity with committed pipeline
Frequently asked questions
- Should billable utilisation be 100%?
- Not as a default assumption. Necessary non-billable work and unavailable time must remain somewhere in the capacity plan. Build the percentage from the actual operating model.
- Does available billable capacity prove there is enough demand?
- No. Capacity and demand are separate. Test expected sales or pipeline against capacity rather than treating the utilisation assumption as a forecast.
- Can a team use one average utilisation percentage?
- It can be a summary if role and schedule differences are first modelled and the weighting is clear. A simple average may hide a bottleneck or unavailable specialist capacity.
Calculation method used in this guide
- Billable Utilisation Planner methodology — Margin101: Time-budget, numerator, denominator and validation boundaries.
- Service Rate & Quote Planner methodology — Margin101: How billable capacity feeds a recovery-rate scenario.