Everhour tracks work time and timecards, giving teams cleaner inputs for utilization, billing, payroll review, and capacity planning.
Measure billable utilization against total capacity and see exactly how many hours you're leaving on the table each period.
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Industry average for agencies: 75–85%
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Team utilization answers one practical question: how much of the team's available working time became billable client work during a defined period. The basic ratio is billable hours divided by available hours, then multiplied by 100. A project manager, finance lead, or owner uses that percentage to check staffing pressure, forecast revenue capacity, and spot teams that look busy without producing enough billable output.
A team calculation needs a consistent scope. Include the same people in the numerator and denominator, use the same date range, and decide whether available hours means gross scheduled capacity, working hours net of PTO and holidays, or total logged hours. A U.S. firm often starts from a 40-hour gross weekly baseline, but the FLSA does not define full-time employment, so capacity remains an employer policy choice.
A team utilization rate changes when you change the available-hours definition. Gross capacity counts scheduled work capacity before leave. Net working capacity subtracts company PTO, holidays, unpaid leave, and other approved absences. Total logged hours compares billable work only against recorded work time, which hides missing time and makes under-tracking look efficient.
For U.S. teams, federal overtime rules require covered nonexempt employees to receive overtime pay for hours worked over 40 in a fixed 168-hour workweek. That explains the common 40-hour baseline and 2,080 gross annual hours. The FLSA does not require payment for time not worked, including vacations, sick leave, or holidays, so paid leave belongs in the denominator only when company policy, contract, or another applicable rule provides it.
Use this formula: team utilization rate = team billable hours ÷ team available hours × 100. Suppose three consultants each have 40 gross weekly hours, giving the team 120 gross hours. One person takes 8 approved PTO hours, and the firm uses net working capacity. Available hours are 112. Their billable hours are 36, 28, and 20, for 84 billable hours.
The team utilization rate is 84 ÷ 112 × 100 = 75%. The same billable total against 120 gross hours would be 70%. Neither result is automatically more correct. The useful result is the one labeled with its denominator, compared against a target built for the same denominator, role mix, and service line.
A one-off calculation is enough for a quick monthly check, a staffing discussion, or a single project retrospective. A spreadsheet can handle the ratio when the team is small, the date range is short, and the billable classification is already clean. The calculation loses value when managers need to chase missing time, reconcile PTO, or explain why reports disagree.
A managed workflow becomes necessary when utilization feeds billing, payroll review, forecasting, or target tracking. Everhour timecards show daily, weekly, and monthly work-hour totals and can compare project hours with working hours, giving managers cleaner inputs before utilization reports move into billing or payroll conversations.
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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Add the team's billable hours for the period, add the team's available hours for the same people and dates, then divide billable hours by available hours and multiply by 100. A team with 420 billable hours and 560 available hours has 75% utilization. Label the denominator as gross capacity, net working capacity, or logged time.
Add hours first for the clearest team-level rate. Averaging individual percentages gives each person equal weight, even when one person worked 10 available hours and another worked 40. Hour-weighted utilization better reflects actual team capacity because the numerator and denominator use the same time base.
PTO changes team utilization only when the firm uses a net-working-hours denominator. Approved leave reduces available hours, so the same billable total can produce a higher utilization percentage. Gross capacity keeps PTO in the denominator and shows capacity lost to absence. Use one method consistently, or the trend line becomes misleading.
A 100% target leaves no room for internal meetings, training, estimates, sales support, administration, bench time, or approved leave. Professional-services teams need non-billable time to keep future work moving and maintain delivery quality. Target utilization should reflect role, service line, seniority, and firm economics, not a country-level legal standard.
Team utilization measures billable hours against available hours. Realization measures billed value against expected or standard value, or billable hours that actually turn into revenue depending on the firm's definition. A team can be highly utilized and still have weak realization if write-downs, discounts, or unbilled billable time reduce revenue.
Everhour timecards show daily, weekly, and monthly work-hour totals, then compare project hours with working hours in Team Hours reporting. Managers can review missing or excessive hours before using the data for utilization, payroll review, or billing handoff.
Everhour Resource Planning shows capacity and workload on a visual timeline, with weekly capacity set per person and time off shown on the schedule. Managers can compare planned capacity with tracked time, then adjust assignments before utilization problems turn into overbooking.
Use Everhour timecards to capture work-hour totals, compare project time with working time, and export approved data for utilization review, payroll checks, and cleaner billing handoffs.
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