Agency Utilization Rate Calculator

What is agency utilization rate?

Utilization rate is the share of your team's available time spent on work. Billable utilization counts only client-billable hours; total utilization counts every logged hour, including internal work, sales support and training.

The formulas

• Capacity = team members × contracted hours per week × weeks
• Billable utilization = billable hours ÷ capacity
• Total utilization = total logged hours ÷ capacity
• Gap to target = (capacity × target %) − billable hours

How to read your result

A healthy target depends on the role. Delivery staff can carry a high billable load; leads, managers and account owners spend part of their week on work that keeps delivery moving but is not billable. Set targets per role, compare billable and total utilization side by side, and look at the trend over several periods rather than a single month. A high total utilization with a low billable share usually points to internal work, rework or unbilled scope changes.

Where the numbers go wrong

• Capacity that ignores leave and public holidays makes utilization look lower than it is. Subtract planned leave from contracted hours.
• Time logged days later is estimated time. Utilization is only as accurate as the timesheets behind it.
• Fixed-fee projects still have billable hours: count the hours spent inside the agreed scope.