Formula
| Term | Meaning |
|---|---|
| Billable hours | Hours recorded against client work that can be invoiced, from timesheets or the project tool, for the period. |
| Working days | Days in the period after weekly offs and holidays. |
| Leave days | Days of approved leave taken in the period, with half days counted as 0.5. |
| Standard daily hours | The company's normal working hours per day, such as 8. |
Worked example
A consultant at a Bengaluru technology consultancy had 22 working days in September 2026 after weekly offs, with an 8-hour standard day. She took 2 days of earned leave and logged 128 billable hours. Her team of 10 logged 1,178 billable hours against 1,520 available hours.
- Available hours = (22 working days minus 2 leave days) x 8 hours = 20 x 8 = 160
- Her billable utilization = 128 / 160 x 100 = 80%
- Team billable utilization = 1,178 / 1,520 x 100 = 77.5%
- Her non-billable hours = 160 minus 128 = 32, spent on internal work, training and pre-sales
Setting targets from your own history
No utilization target fits every role. Senior people spend time on pre-sales, reviews and mentoring, trainees spend time learning, and delivery staff should bill most of their time. Set targets by role and level from your own past quarters, at the utilization where projects were profitable and people stayed. A target that ignores training, leave and internal work pushes people to pad timesheets or burn out.
Available hours: the denominator matters
Always subtract approved leave and holidays from available hours, otherwise a consultant who took a well-earned week off looks underused. Decide whether available hours use the standard day or the hours actually worked, and keep the rule fixed. Some firms measure against total paid hours instead, which gives a lower figure. Label the method on every report so project managers and finance read the same number.
- Utilization against available hours: fair to people on leave.
- Utilization against paid hours: shows the full cost view.
- Billable hours per FTE: useful for pricing.
Pitfalls in utilization data
Timesheets filled at month end from memory are the biggest source of error. Ask for weekly timesheets and compare billable hours with attendance hours to catch impossible entries. High utilization over many months can hide overtime and fatigue, so read it alongside overtime and attrition. And do not count unbilled rework on a fixed-price project as billable just to lift the number.
How to improve it
- Plan staffing weekly so people move to the next project without idle gaps.
- Keep short internal projects ready for people between client assignments.
- Cut internal meetings and admin for delivery roles.
- Set utilization targets by role and level, with time allowed for training and pre-sales.
- Review timesheets weekly and compare them with attendance hours.
Tracking it in ZeniaHR
ZeniaHR does not track projects or billable hours, so billable time comes from your timesheet or project tool. ZeniaHR supplies the available-hours side: effective hours from Attendance Punches, approved leave from the Leave Ledger, and holidays from the Holiday Calendars for each branch and department. Download effective hours from the day log CSV, add leave and holidays for the period, and calculate utilization in a spreadsheet.
See it on your own data
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Book a free demoSee pricingFrequently asked questions
How do you calculate billable utilization?
Divide billable hours in the period by available hours and multiply by 100. Available hours are the working days after weekly offs and holidays, minus leave days, multiplied by standard daily hours. For example, 128 billable hours out of 160 available hours gives a billable utilization of 80 percent.
What is a good billable utilization rate?
It depends on the role. Delivery staff can bill most of their time, while senior people, managers and trainees have legitimate non-billable work such as pre-sales, reviews and learning. Set targets by role from your own history, at levels where projects were profitable and people did not burn out.
Should leave be excluded from available hours?
Yes, for the standard measure. Approved leave and holidays are time the person was not expected to work, so including them would make anyone who takes leave look underused. If you also want a cost view, report a second figure against total paid hours and label both clearly.