Everhour keeps capacity, approvals, and team rules organized while you calculate utilization from billable time and available hours.
Measure billable utilization against total capacity and see exactly how many hours you're leaving on the table each period.
Working hours this period
Industry average for agencies: 75–85%
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Utilization rate answers one practical question: out of the hours a person or team was available to work, how many hours produced the work you count toward the target? On a Mac, the calculation does not change; use Split View to keep source timesheets, project reports, or billing notes beside the calculator while you check the inputs.
For U.S. teams, the denominator comes from firm policy. The FLSA does not define full-time or part-time employment, so full-time capacity is not a federal legal threshold. 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 utilization formula is billable or target-counted hours divided by available hours, then multiplied by 100. If an employee records 30 billable hours during a 40-hour available week, utilization is 75%. At a $155 standard billing rate, those 30 hours carry $4,650 of billable value, and the effective value across all available capacity is $116.25 per hour.
Annual capacity follows the same logic. A 40-hour weekly capacity baseline equals 2,080 annual gross hours before subtracting company PTO, holidays, unpaid leave, or other nonworking time. If your firm uses net working hours, subtract approved absences from the denominator. The FLSA does not require payment for time not worked, including vacations, sick leave, or holidays, so paid leave treatment comes from policy, contract, or another applicable rule.
A utilization target is a management benchmark, not a U.S. statutory requirement. Federal sources define work-hour and leave rules, but they do not set a professional-services utilization target. A target should reflect the role, service line, delivery model, and expected nonbillable work. A consultant, account manager, designer, and practice lead should not share one target unless their workload mix is the same.
The common mistake is importing a legal or statistical threshold into a business metric. BLS classifies workers as full time in CPS statistics when they usually work 35 or more hours per week, but BLS states this is a statistical definition, not a legal one. Use that number only if it matches your internal capacity policy.
A calculator is enough when you need a quick utilization check for one person, one week, or one project review. It works well when the inputs are already approved and the denominator is clear. For example, a manager can compare billable hours against planned capacity before a staffing meeting without changing payroll records or billing data.
A managed workflow becomes necessary when utilization affects performance reviews, client billing, payroll handoff, or staffing decisions. Everhour Team Management supports lock rules, admin time correction, personal tracking limits, weekly capacity, approval workflow, roles, project assignments, team groups, and team-wide time policy defaults, so the same capacity rules can carry through reporting instead of being rebuilt in a spreadsheet.
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 the hours your firm counts toward the utilization target. For many professional-services teams, that means billable client delivery hours. Some teams also count approved internal project work, but they should label it separately from billable utilization. Exclude paid time not worked unless your internal policy explicitly treats it as target-counted time.
PTO and holidays reduce available hours when your firm uses a net-working-hours denominator. The FLSA does not require payment for time not worked, including vacations, sick leave, or holidays. OPM lists 11 federal holidays in 2026, but those are federal employee holidays. Private-sector paid holidays depend on employer policy unless another law or contract applies.
A 2,080-hour annual baseline works only as gross capacity for a 40-hour weekly schedule. It equals 40 hours multiplied by 52 weeks before PTO, holidays, unpaid leave, and other nonworking time. Part-time schedules, unpaid leave, FMLA leave actually taken, and policy-based paid time off should change the denominator when you calculate net available hours.
Utilization can exceed 100% when counted hours are higher than the available-hours denominator. That can happen after overtime, an understated capacity baseline, missed PTO deductions, or billable work recorded outside the expected schedule. Treat the result as a signal to inspect the inputs before using it for staffing or performance decisions.
A Mac does not change the formula, the numerator, or the denominator. The practical advantage is workflow: keep the calculator open beside timesheets, project reports, or billing records, then save the final view as a PDF if you need an audit note for a manager, finance reviewer, or client file.
Everhour Team Management lets admins define weekly capacity, apply approval workflows, lock completed periods, correct time entries, and group team members for department-level reporting. Those controls keep utilization inputs consistent before managers use the numbers for staffing, payroll review, or billing decisions.
Replace one-off spreadsheet checks with approved capacity rules, locked periods, and team-level controls. Everhour Team Management keeps utilization inputs consistent before they affect billing, payroll review, and staffing decisions.
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