Billable utilisation rate is billable hours divided by available hours, multiplied by 100. Available hours are contracted hours minus holidays and approved leave. Most delivery staff target 70–80%.
It sounds like a simple ratio. In practice, two firms with identical timesheets can report very different numbers, because they divide by different hours. This guide shows the formula, the available-hours maths for US and UK teams, and one month of approved timesheets worked three ways. It ends with realistic targets by role.
Quick Answer
What is billable utilisation and how do you calculate it? It is the share of available working time spent on chargeable client work. The formula is billable hours ÷ available hours × 100. A consultant with 1,740 available hours a year who bills 1,305 of them runs at 75%. A good rate for fee-earning staff is usually 70–80%, lower for managers and much lower for partners.
What is billable utilisation?
Billable utilisation measures how much of a person’s available time becomes chargeable client work. It is the core productivity number in consultancies, agencies, law firms and accounting practices. Revenue is driven by billable hours, and billable hours are capped by capacity.
It is narrower than overall utilisation rate, which some firms calculate with all productive hours on top, including internal projects, training and sales. The employee utilisation rate guide covers that broader metric and industry benchmarks. This page sticks to the billable-only version that drives revenue forecasts.
Three inputs decide the result:
- Billable hours: time recorded against a client, project or task marked billable.
- Available hours: the hours a person is expected to work, less holidays and approved leave.
- Tracked hours: everything actually recorded, billable or not. This matters for billability, covered below.
Get the billable hours wrong and every other number is wrong too. That’s why tracking billable hours daily, with approval before invoicing, comes before any utilisation target.
How do you calculate billable utilisation rate?
Use the same three steps for one person, a team or the whole firm.
- Work out available hours. Start with contracted hours for the period. Subtract public holidays, annual leave and other approved absence.
- Total the approved billable hours. Use approved timesheet entries only. Draft or rejected time distorts the number.
- Divide and multiply by 100. Billable hours ÷ available hours × 100 = billable utilisation rate.
Billable utilisation rate = (Billable hours ÷ Available hours) × 100For a team or firm, add up billable hours and available hours across everyone first, then divide. Don’t average individual percentages. Averaging gives a part-timer the same weight as a full-timer.
How many available hours are there in a US or UK working year?
The denominator is where most calculations go wrong. Here is a typical annual figure for a full-time employee in each country.
| Step | US example | UK example |
|---|---|---|
| Contracted hours | 40 h × 52 weeks = 2,080 | 37.5 h × 52 weeks = 1,950 |
| Public holidays | 11 federal holidays × 8 h = 88 | Included in leave below |
| Annual leave | 15 days PTO × 8 h = 120 (assumed) | 28 days × 7.5 h = 210 |
| Available hours | 1,872 | 1,740 |
| Billable hours at 75% | 1,404 | 1,305 |
The US row uses the 11 federal holidays on the OPM 2026 holiday schedule. There is no federal minimum for paid vacation, so the 15 days are an assumption; use your own policy. In the UK, most full-time workers get at least 28 days’ paid leave, which can include bank holidays. See GOV.UK holiday entitlement guidance. Both checked 19 October 2026.
Sick leave is a judgement call. Many firms subtract an average allowance up front. Others subtract actual sick days as they happen. Pick one method and keep it.
What does billable utilisation look like on real timesheets?
Here is an illustrative four-person team over a four-week month. Everyone is contracted for 37.5 hours a week, so capacity is 150 hours each. Every figure comes from approved timesheets.
| Person | Capacity | Time off | Available | Tracked | Billable |
|---|---|---|---|---|---|
| Partner | 150 | 0 | 150 | 165 | 66 |
| Manager | 150 | 15 | 135 | 140 | 98 |
| Senior consultant | 150 | 0 | 150 | 155 | 124 |
| Analyst | 150 | 37.5 | 112.5 | 115 | 92 |
| Team | 600 | 52.5 | 547.5 | 575 | 380 |
Now divide the same 380 billable hours by three different denominators:
| Method | Calculation | Team result |
|---|---|---|
| Billable ÷ capacity | 380 ÷ 600 | 63.3% |
| Billable ÷ tracked hours | 380 ÷ 575 | 66.1% |
| Billable ÷ available hours | 380 ÷ 547.5 | 69.4% |
Same team, same month, a six-point spread. The analyst shows why it matters. Against capacity they look weak at 61%. Against available hours they hit 82%, because they were on leave for a week.
Decision rule: use billable ÷ available hours for staffing, targets and performance conversations. Use billable ÷ tracked hours to diagnose how work is split. Never compare a utilisation figure from another firm until you know which denominator it uses.
Billability vs utilisation: what is the difference?
The two terms are often swapped, but they answer different questions. Definitions vary between firms, so write yours down.
| Utilisation | Billability | |
|---|---|---|
| Formula | Billable hours ÷ available hours | Billable hours ÷ hours worked (tracked) |
| Question it answers | Are we using our capacity? | Of the time worked, how much could we charge? |
| What drags it down | Bench time, missing timesheets, too little sold work | Internal meetings, admin, unscoped client requests |
| Typical use | Hiring, staffing, revenue forecasts | Process fixes, scoping, pricing |
Look at the partner above. Their billability is 40% (66 ÷ 165) and their utilisation is 44% (66 ÷ 150). Both are normal for a partner who sells and manages.
A low billability score with high hours worked points to non-billable overhead. A low utilisation score with normal billability points to a pipeline or capacity problem. The fix is different, so measure both. A consistent way to separate billable and non-billable hours keeps both numbers honest.
What is a good billable utilisation rate?
A good billable utilisation rate for most fee-earning delivery staff is 70–80%. Firm-wide averages sit lower because managers and partners carry sales and leadership work.
The industry is currently below that target. The 2026 SPI Professional Services Maturity Benchmark, summarised by Deltek, reported average billable utilisation of 66.4% in 2025. That was the lowest in SPI’s survey history and below its 75% target (checked 19 October 2026).
Targets should vary by role. These ranges are common planning starting points, not survey results:
| Role | Typical billable utilisation target | Why |
|---|---|---|
| Analyst or junior consultant | 80–85% | Mostly delivery work, little selling |
| Senior consultant | 75–80% | Delivery plus reviews and mentoring |
| Manager or team lead | 60–70% | Staffing, client management, hiring |
| Director | 40–55% | Account growth and quality oversight |
| Partner or principal | 30–40% | Sales, firm leadership, key client work |
Two warning signs matter more than any single month. Fee-earners below 60% for a quarter suggest a pipeline, scoping or recording problem. Sustained rates above 85% point to burnout risk and a team with no slack for internal work.
What is one percentage point of utilisation worth?
Quite a lot. Take an illustrative firm of 20 UK consultants with 1,740 available hours each, billing at £120 an hour.
- One point of utilisation is 17.4 hours per person per year.
- That is £2,088 of billable work per person.
- Across 20 people it is £41,760 a year.
Moving from 66% to 70% would be worth about £167,000 with no new hires. Run the same sum with your headcount, available hours and average rate. To see how much of that billed time is actually collected, pair this with your realisation rate.
How do you improve billable utilisation without burning people out?
Start with the data, then the work. Many “low utilisation” problems are really recording problems.
- Close timesheet gaps first. Unlogged billable time looks like idle capacity. Daily logging and weekly approval recover hours before you change anything else.
- Classify time at entry. Mark work billable or non-billable when it is recorded, not at invoice time.
- Review the non-billable list monthly. Look for recurring internal meetings and unscoped client requests. The second can often be billed through a change request.
- Staff from available hours. Plan projects against capacity minus booked leave, not raw contracted hours.
- Set targets as ranges by role. A single firm-wide target pushes juniors too hard and makes partners look idle.
- Watch the trend, not the week. A quarter shows the pattern. One slow week after a holiday doesn’t.
Engineering teams have their own overhead, such as code review and on-call. A CTO dashboard for team utilisation shows how to separate it at team level.
How do AI timekeeping platforms affect billable utilisation?
AI timekeeping platforms mainly change the numerator. They suggest entries from calendars, documents and activity, so less billable time goes unrecorded. Measured billable utilisation often rises simply because more real work is captured.
Two cautions apply. Suggested entries still need human review before they count as billable, or the rate becomes inflated. And work done by AI agents should be measured separately from human hours. The AI agent utilisation rate guide explains how to account for agent output without distorting human utilisation figures.
Where does Keito fit?
Keito calculates utilisation from approved time entries, so the number matches what you invoice. The denominator is a workspace setting under Settings → Utilisation metric:
- Billable / capacity (the default) measures billable hours against weekly capacity.
- Billable / tracked hours measures the billable share of time actually worked, which is billability.
- Show both reports utilisation on tracked hours plus a separate Availability metric against capacity.
On the Dashboard, capacity is available capacity: scheduled hours less holidays and approved time off. Pending leave is not deducted. The capacity planning docs explain each view. For a product overview, see utilisation rate software.
Key Takeaway
Billable utilisation is billable hours ÷ available hours. Agree the denominator, use approved time and set targets by role, not firm-wide.
Measure billable utilisation from the hours you invoice
Keito builds utilisation from approved timesheets, takes holidays and approved leave out of capacity, and shows billability alongside it.
Frequently Asked Questions
What is billable utilisation?
Billable utilisation is the percentage of a person’s available working hours spent on client work you can charge for. It shows how much of your capacity turns into revenue. It excludes internal projects, training and sales time.
How do you calculate billable utilisation rate?
Divide approved billable hours by available hours and multiply by 100. Available hours are contracted hours minus holidays and approved leave. For example, 1,305 billable hours out of 1,740 available hours is 75%.
What is a good billable utilisation rate?
A good billable utilisation rate for fee-earning delivery staff is usually 70–80%. Managers often target 60–70% and partners 30–40%. SPI Research reported an industry average of 66.4% in 2025, below its 75% target.
What is the difference between billability and utilisation?
Utilisation divides billable hours by available hours, so it shows how well capacity is used. Billability divides billable hours by hours actually worked, so it shows how much of the work could be charged. Many firms track both because they point to different fixes.
Should non-billable internal work count in utilisation?
Not in billable utilisation, which counts chargeable client hours only. Internal projects, training and sales count in a broader productive utilisation measure. Track them separately so you can see both numbers.
Can billable utilisation be over 100%?
Yes, when billable hours exceed the hours in the denominator, usually because of overtime. A rate above 100% against available hours means someone billed more than their expected week. Treat it as a workload warning, not a success.