Everhour tracks time off alongside work time, so utilization denominators reflect real capacity instead of raw schedules.
Measure billable utilization against total capacity and see exactly how many hours you're leaving on the table each period.
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Available hours answer one practical question: how many working hours should a person, team, or role be measured against for utilization? The figure starts with employer-defined gross capacity, then removes time the person was not expected to work. For a full-time U.S. employee, many firms start with 40 hours per week because federal overtime rules require covered nonexempt employees to receive overtime pay for hours worked over 40 in a fixed 168-hour workweek.
The FLSA does not define full-time or part-time employment, so available hours are a policy denominator, not a federal legal threshold. BLS uses 35 or more usual weekly hours as a full-time statistical definition in CPS data, but that does not set a utilization denominator for a private employer. Your calculation should name the policy behind the number, especially when comparing people with different schedules.
Use this formula for a net-working-hours denominator: gross capacity minus PTO, paid holidays, unpaid leave, and other approved nonworking time. A 40-hour weekly baseline equals 2,080 gross annual hours before those reductions. If an employee has 15 PTO days at 8 hours per day and the company grants 11 paid holidays at 8 hours per day, available hours equal 1,872 for the year.
That denominator then supports utilization math. If the employee records 1,310 billable hours, utilization is 1,310 divided by 1,872, or 69.98%. The same billable hours divided by 2,080 gross hours produce 62.98%. Both rates can be mathematically correct, but they answer different questions. Label the denominator as gross capacity or net available hours before using the rate in staffing, bonuses, or planning.
U.S. federal law does not mandate paid vacation, sick leave, or holiday pay for private employers under the FLSA. That absence is not a 0% utilization rule. It means each employer's policy, contract, collective bargaining agreement, or applicable state or local rule determines whether paid time off reduces the denominator. OPM lists 11 federal holidays in 2026, but those holidays apply to federal employees, not automatically to private-sector paid holiday policies.
Actual leave taken also matters. Eligible employees of covered employers may take up to 12 workweeks of unpaid, job-protected FMLA leave in a 12-month period for qualifying reasons. If your firm uses a net-working-hours denominator, actual FMLA leave taken should reduce available hours. OECD actual-hours definitions also exclude holidays, paid leave, illness, maternity or parental leave, and similar absences, so actual hours worked are distinct from gross capacity.
A one-off calculation is enough when you need a single annual denominator for one person, a quick utilization check, or a spreadsheet formula review. It works when the inputs are stable: weekly capacity, PTO days, holiday policy, and approved unpaid leave. Document the denominator choice beside the result so another person can reproduce the same utilization rate later.
A managed workflow becomes necessary when capacity changes by employee, PTO is approved during the year, holidays vary by location, or utilization feeds staffing decisions. Everhour Time Off tracks vacations, sick leave, holidays, and custom leave types with partial-day durations, approval status, balances, and capacity-scaled day lengths, then brings that time-off data into timesheets and reports. That keeps the denominator connected to approved absences instead of a stale spreadsheet assumption.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
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Available hours are the hours a person is expected to be available for work after subtracting approved nonworking time from gross capacity. Common reductions include PTO, paid holidays, unpaid leave, sick leave, and other absences your policy treats as unavailable time. Keep billable hours out of this calculation. Billable hours are the numerator in utilization, while available hours are the denominator.
Gross capacity measures scheduled capacity before absences, such as 40 hours per week times 52 weeks for 2,080 annual hours. Net available hours subtract approved nonworking time. A person with 2,080 gross hours, 120 PTO hours, and 88 paid holiday hours has 1,872 net available hours. Utilization rises when you use the smaller net denominator.
Federal holidays reduce available hours only if your private employer policy, contract, or applicable law treats those days as paid or unpaid nonworking time. OPM lists 11 federal holidays in 2026 for federal employees. Private-sector paid holidays are not mandated by the FLSA, so the denominator should follow the employer's actual holiday policy.
Actual FMLA leave taken should reduce available hours when the organization uses a net-working-hours denominator. Eligible employees of covered employers may take up to 12 workweeks of unpaid, job-protected FMLA leave in a 12-month period for qualifying reasons. The entitlement itself does not reduce capacity until leave is taken or scheduled into the measurement period.
Two teams can use different formulas if their schedules, leave policies, or utilization goals differ. A delivery team can use net available hours after PTO and holidays, while a finance model can use gross capacity for long-range staffing. The mistake is mixing those denominators in one benchmark table without labels, because the same billable hours will produce different percentages.
Everhour Time Off tracks vacations, sick leave, holidays, and custom leave types with full-day, partial-day, and custom-period durations. Approved time off flows into timesheets and reports, so managers can compare work time, time off, and capacity without manually rebuilding each person's available-hours denominator.
Track PTO, holidays, and custom leave beside work time. Everhour turns approved time off into timesheet and reporting data, giving utilization reviews a cleaner capacity denominator.
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