Utilisation rate: how to calculate it, and what good looks like
Updated July 2026
Utilisation is the number that decides whether a service firm's payroll makes money. It is also one of the most commonly miscalculated numbers in the industry. This guide gives you the exact formula, a worked example, and the benchmarks to judge your own number against.
What utilisation rate means
Utilisation rate is the share of your team's available working time that goes into real, planned work. Firms usually track two flavours, and mixing them up is the first way the number lies:
- Scheduled utilisation: planned work hours divided by available hours. It answers "how full is the team?"
- Billable utilisation: billable hours divided by available hours. It answers "how much of the payroll is earning?"
A team can be 95% scheduled and 40% billable. Both numbers matter, and they answer different questions, so always label which one you are quoting.
The formula
The trap is the denominator. Available hours are not contracted hours. They are contracted hours net of annual leave, public holidays, and any structural time your firm reserves for meetings and admin. A denominator that ignores leave flatters everyone in December and slanders everyone in June.
A worked example
A five-person team, 40 hours a week, over a 13-week quarter. Gross capacity is 5 × 40 × 13 = 2,600 hours. The team takes 12 days of annual leave in the quarter and there are 3 public holidays. At 8 hours a day, that removes 12 × 8 = 96 leave hours and 3 × 5 × 8 = 120 holiday hours.
Run your own numbers in our free utilisation calculator.
What good looks like
- Under 50%: capacity is leaking. Usually a pipeline problem, not a people problem.
- 50 to 65%: normal for firms with heavy internal work; there is room to sell.
- 65 to 80%: the healthy band most professional service firms target for delivery staff.
- 80 to 90%: profitable on paper, fragile in practice. One sick day cascades.
- Over 90%: overheating. There is no slack for revisions, emergencies or thinking, and burnout follows.
The counterintuitive part: 100% is not the goal. A schedule with zero slack breaks the first time reality moves, and reality moves weekly. Well-run firms deliberately hold buffer, then measure utilisation against the capacity that remains.
The mistakes that make the number lie
- Not netting out leave and public holidays, which quietly punishes people for taking approved time off.
- Quoting billable utilisation to the board but measuring scheduled utilisation internally, or the reverse.
- Measuring once a year from timesheets. By the time the number arrives, the quarter that caused it is long gone.
- Treating a low individual number as a performance problem when the real cause is how work was allocated.
- Forgetting joiners and leavers. A person who joined mid-quarter needs a prorated denominator.
How firms improve it
Measure continuously instead of annually, plan work against real capacity rather than optimism, protect a small buffer per person per day so plans survive contact with reality, and rebalance across the team when someone is overloaded while a teammate is idle. None of this needs heroics. It needs the number to be visible while there is still time to act on it.
Stasis measures utilisation while it plans the week.
Stasis plans every person's week automatically and measures utilisation, capacity and margin while it does it. Early access is opening soon, and the waitlist goes first.