Utilization is billable hours over total available hours — the core productivity metric for agencies and freelancers. It shows how much of paid time actually generates revenue.
The example
30 billable of 40 available.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | Billable | 30 |
| 3 | Available | 40 → 75% |
The formula
The formula:
How it works
How it works:
- Divide billable hours by available (paid) hours for the utilization rate.
- Agencies often target 70–85% — the rest goes to admin, sales, and training.
- Too high signals burnout or no growth time; too low signals idle capacity.
- Track per person with
SUMIF, then average for a team-wide figure.
Utilization drives the rate math. It’s the same billable-percentage that sets a sustainable hourly rate — at 75% utilization, a $100 effective rate needs a ~$133 billed rate to cover the non-billable 25%. Tracking utilization and effective rate together tells you whether you’re busy and profitable, not just busy.
Try it: interactive demo
Billable and available hours.
Variations
Per person
One team member:
Team average
Across staff:
Non-billable share
The remainder:
Pitfalls & errors
Define available hours. Paid hours, not calendar hours — subtract PTO.
Balance the target. Very high utilization leaves no room for sales or rest.
Zero available. No available hours gives #DIV/0!.
Practice workbook
Frequently asked questions
How do I calculate billable utilization in Excel?
What's a good utilization rate?
How does utilization relate to my rate?
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