Billable Utilization Calculator

Understanding Billable Utilization

Billable utilization is the percentage of your total working hours that are spent on client-billable work. It is one of the most important metrics for freelancers, consultants, and service-based businesses because it directly determines your revenue capacity.

The Utilization Formula

Utilization Rate = (Billable Hours / Total Working Hours) x 100

For example, if you work 40 hours per week and bill clients for 30 of those hours, your utilization rate is 75%.

What Is a Good Utilization Rate?

• Below 50% — Low. Too much time is being spent on non-revenue activities. Review your workflow.
• 50-65% — Moderate. Common for solo consultants who handle their own admin, marketing, and sales.
• 65-80% — Strong. This is the sweet spot for most service professionals.
• Above 80% — Very high. Watch for burnout and make sure you have time for business development.

Effective Hourly Rate

Your effective hourly rate is your total revenue divided by your total working hours (not just billable hours). If you charge $150/hour but only bill 25 of 40 hours per week, your effective rate is $93.75/hour. Improving utilization is the fastest way to increase your effective rate without raising prices.

Non-Billable Time

Non-billable time includes administrative tasks, marketing, sales calls, professional development, and internal meetings. While necessary, minimizing and batching this work helps protect your revenue-generating capacity.