Everhour helps teams manage capacity and approvals, while a clear utilization rate needs billable hours and a named denominator.
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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Utilization answers one operational question: of the hours a person, role, team, or project had available, how many became billable? The basic ratio is billable hours divided by available hours. A user-friendly calculation makes the denominator visible, because 30 billable hours against 40 gross capacity means something different from 30 billable hours against 36 net working hours.
For U.S. teams, full-time capacity is an employer policy input. The FLSA does not define full-time or part-time employment. Many firms still use 40 weekly hours as gross capacity because federal overtime rules require covered nonexempt employees to receive overtime pay for hours worked over 40 in a fixed 168-hour workweek. A 40-hour week equals 2,080 gross annual hours before company PTO, holidays, unpaid leave, or other absences.
The most common mistake is labeling every version of the ratio as "utilization" without naming available hours. Gross capacity uses scheduled capacity before leave. Net working capacity subtracts company PTO, holidays, unpaid leave, and similar absences. Total logged time uses time entries as the denominator, which turns the result into a billability mix rather than a capacity measure.
A user-friendly result should read like this: 75% utilization against 40 gross weekly hours, or 83.33% utilization against 36 net working hours. The second figure is higher because the denominator excludes 4 unavailable hours. Private-sector paid holidays and vacation are policy choices under U.S. federal law, although BLS reported 80% access to paid vacation and 81% access to paid holidays for private industry workers in 2025.
Use this formula: utilization rate = billable hours ÷ available hours × 100. For a consultant with 30 billable hours and 40 gross available hours, utilization is 75%. If the same week includes 4 hours of company-approved paid leave and the firm uses a net-working-hours denominator, available hours drop to 36 and utilization becomes 83.33%.
The billable-hours input should include time the firm treats as client-chargeable. The available-hours input should follow one policy for the whole report. Do not mix gross annual capacity, net working capacity, and total logged time in the same comparison. A team average only works when every person's numerator and denominator follow the same definitions.
A one-off calculator is enough when you need a fast check for one person, one week, or one project. It also works for sanity-checking a target: 28 billable hours against 35 net available hours gives 80%, and the math is transparent. The result belongs in notes or a spreadsheet when no recurring approval, staffing, or billing decision depends on it.
A managed workflow becomes necessary when utilization affects staffing, approvals, payroll review, or billing handoff. Everhour Team Management supports weekly capacity, roles, project assignments, team groups, lock rules, admin time correction, personal tracking limits, and approval workflows. Those controls keep the denominator, submitted hours, and final reports aligned over time.
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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Use billable hours in the numerator. Billable hours are the hours your firm treats as client-chargeable under its pricing, contract, or internal billing policy. Internal meetings, admin work, training, business development, and leave stay out unless your firm has explicitly classified a category as billable for that report.
The same billable work produces different percentages under different denominator policies. A 30-hour billable week equals 75% against 40 gross capacity and 83.33% against 36 net working hours. The label tells the reader whether the percentage measures billable work against full scheduled capacity, leave-adjusted availability, or total logged time.
Yes. The cleanest version asks for billable hours, gross capacity, and unavailable hours, then computes the net denominator. In U.S. private employment, the FLSA does not require payment for time not worked, including vacations, sick leave, or federal or other holidays, so PTO and holiday treatment must follow company policy, contract terms, or another applicable rule.
Unpaid leave should reduce available hours when the report 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. Actual leave taken should not remain in available hours if the purpose is to measure utilization against time the person could work.
Utilization measures billable hours divided by available hours. Realization compares billed or collectible value with the value of billable work recorded. A person can show high utilization while the project realizes less revenue because of write-downs, fixed-fee overruns, discounts, or unbilled billable time.
Everhour Team Management lets admins set weekly capacity, roles, project assignments, team groups, tracking limits, lock rules, and approval workflows. That structure keeps submitted hours, capacity expectations, and manager-approved records consistent before utilization reports inform staffing or billing decisions.
Everhour Resource Planning shows workload and capacity on a visual timeline by member or project. Managers can compare planned capacity with tracked time, see scheduled time off, and spot overallocated people before utilization problems turn into missed delivery dates.
Set capacity rules, approve time, and lock completed periods before reports drive staffing or billing. Everhour Team Management keeps utilization inputs consistent across teams.
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