Employee utilization rate: formula and benchmarks

Meet Monica, who leads a consulting practice. Arjun and Sara are two of her consultants. They're fictional, but their months will feel familiar. Monica wants to know how busy her team really is, and a utilization rate is her answer.

We'll follow Monica as she builds the rate, sets rules for time off and picks targets, and we'll check what Arjun and Sara see from their side.

What is employee utilization rate?

Employee utilization rate is the share of an employee's available working hours that go to work, such as client projects or other planned tasks. It turns a feeling of being busy into one number. Managers use it to staff projects and spot people who are overloaded or have spare time.

The rate can describe one person or a whole team. This guide stays at the person level.

Monica sees that Sara looks busy all day. She wants a number she can compare across the team, not a hunch.

In short: a rate only helps when everyone is measured the same way.

How do you calculate utilization rate?

Utilization is a ratio of billable hours to available hours, shown as a percentage. Float writes the utilization rate formula as billable hours divided by available hours, times 100. The steps are below, using made-up hours. The one choice that changes the answer is what you count as available.

Billable hours are the hours charged to a client. These hours are made up to show the steps, and they are not a benchmark. Try your own hours in this guide's calculator, or in the Excel report template that goes with it.

Employee utilization report template
An Excel workbook with one row per person, a switch for how training is counted, billable and total rates, and a target check. The file sits next to the draft as employee-utilization-template.xlsx.

Arjun types his hours from memory on the last day of the month. Monica's first report puts him far below Sara, until they find he skipped most of one week.

In short: the formula is easy, and the hours you feed it are the hard part.

Which hours count as available time?

Available time is the hours a person could have worked: contracted hours minus approved leave and paid time off (PTO), such as holidays. Training is the gray area. Some firms count it as available time and some remove it. Either choice is fine if you write it down and apply it to everyone, every period.

Gross hours are all contracted hours. Net hours remove time off. Using gross hours makes leave look like idle time.

Arjun's rate looks poor in March, and he takes it personally. He had approved leave and a training course that month, and nobody had written down whether those count.

The billable work is the same each time. Only the rule changes.

In short: a rate that moves because the rules changed is a bookkeeping problem, not a performance problem.

Should you report billable or total hours?

Report both, and label each one. Billable utilization shows how much of a person's time earned revenue. Total utilization shows how much of it went to any planned work, including internal projects and training. One rate answers a pricing question and the other answers a workload question.

Billable utilizationcounts client time only.

• Hours charged to a client
• Drives revenue and pricing

Total utilizationcounts all planned work.

• Billable and internal work, plus training
• Shows workload and overload

The made-up month above shows the gap: total utilization runs well above billable once internal work and training count. Both numbers are true.

Arjun spends much of the month mentoring new hires. Monica reads only the billable report at first and asks him why he's slow.

In short: a low billable rate can sit next to a full week, so read the pair before you judge anyone.

What is a good utilization rate?

It depends on the job. SPI Research says its past data linked a rate between 70% and 80% to the highest profitability, and that firms above 80% see more burnout and attrition. Use that range as a starting point for billable roles, then adjust for your own work.

Deltek's summary of SPI's 2026 report says billable utilization fell to 66.4% in 2025, down from 68.9% in 2024 and a high of 73.2% in 2021. That comes through Deltek, not SPI's own page.

These figures cover professional services firms, the group Monica's consulting practice belongs to. We couldn't verify a dated, primary benchmark for agencies, IT services, staffing or other industries, so we don't print one. Be wary of tables of ideal rates by industry that name no survey.

Monica copies a very high target from a blog and hands it to the team. Everyone misses it for months, and Sara quietly stops logging her training.

In short: a sourced range is where you start, and your own history decides where you land.

How should targets differ by role?

Set targets by role, not by company. List what each role does besides billable work, such as mentoring and hiring, then set a target as a share of available hours. Check it against your own history and review it every quarter.

No verified benchmark covers every role, so this table gives a method, not numbers.

Sara, a senior consultant, sees that her target is lower than Arjun's and wonders whether Monica thinks she's slow.

In short: write the reason beside every target.

Can you track it fairly and raise it without burnout?

Track utilization from real time records, show people their own numbers, and use the rate to start conversations, not to rank people. Raise it by matching work to people, not by adding hours. Watch for a high rate that lasts for weeks before you push it higher.

• Employersplan work a few weeks ahead so gaps show early.move work from overloaded people to people with room.tell people what counts and who sees the rate.
• Employeeslog all your work, including internal tasks.check your own totals and raise overload early.

We360.ai is our product. Its timesheet docs describe a weekly view where employees log work and mark each row billable or non-billable. Its Capacity Planning docs describe reviewing utilization across teams and time periods.

What it collectsfor utilization work.

• Timesheet rows with task and duration
• A billable or non-billable flag on each row
• Keyboard and mouse activity, not what was typed

Where you control itas a manager.

• Employees submit a week, and managers approve, reject or reopen it
• Capacity views compare planned and actual workload

What it never collectsfrom employees.

• Individual typed characters
• Webcam feeds

The docs' privacy page lists what is and isn't captured. One honest limit: the pages we read don't describe an automatic utilization rate or a target setting, so keep the formula in a spreadsheet or your own reports. The wellness docs sort employees into Healthy, Overburdened or Underutilized and say to use the data to inform, not punish.

Sara has run above her usual rate for weeks and hasn't said a word. Monica nearly misses it because she was watching Arjun's low rate.

In short: balance the load first, and the number follows. For the gap between projects, read our post on bench time, and for uneven work, see workload analysis. The timesheet feature and workforce analytics pages show the product side.

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