Worked example: an 8-person dev shop
Each developer has 1,880 available hours after PTO and holidays. At 72% utilization they bill 1,354 hours — at $165/hr that is $223,410 per person, $1.79M for the team. Moving the team from 72% to 77% — one less standing meeting and tighter scope handoffs — adds roughly $124,000 of revenue with zero new hires.
- • Measure weekly; utilization is a leading indicator you can still fix mid-quarter.
- • Bench time from weak pipeline is a sales problem, not a delivery problem — treat it that way.
- • Write-downs (billed at less than standard) belong in realization, not utilization.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
What is a good billable utilization rate?
For agencies and consultancies, 65–80% of available hours is the sustainable band. Sustained rates above 85% predict burnout and stalled business development; below 60% usually means a pipeline or staffing problem.
How do you calculate utilization?
Billable hours ÷ available hours. Available hours = 2,080 minus PTO, holidays, and company-wide time. Use actual logged time, not estimates — and decide up front whether internal projects count.
What is the difference between utilization and realization?
Utilization measures hours worked on client work; realization measures how much of that work actually gets billed and collected at standard rates. A consultant can be 90% utilized and 70% realized if work is written down.
How do I improve utilization?
Fix the pipeline first (bench = sales problem), then cut low-value internal meetings, tighten scope so work doesn't spill unbilled, staff projects at the right seniority, and track weekly so problems surface early.
How this calculator is built
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Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
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Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.
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