Definition
What is Billable Utilization?
The share of available working hours actually billed to clients.
Billable utilization is the core capacity metric of agencies and professional services. Revenue capacity = headcount × available hours × utilization × rate, so a few points of utilization move revenue as much as a hiring round. Sustainable targets usually land between 65% and 80% — above that, delivery quality, business development, and team health degrade; below it, overhead consumes margin.
Formula
Utilization (%) = Billable Hours ÷ Available Hours × 100Example
A 6-person team with 240 weekly available hours billing 156 of them runs at 65% utilization. At $150/hour that is $23,400/week of realized capacity.