Agency Utilization Target Calculator
Work out the billable utilization your team must hit to reach a revenue target from your headcount, rate and available hours.
How it works
Capacity = staff × available hours · Required hours = target ÷ rate · Utilization % = required hours ÷ capacity × 100
Utilization is the share of paid-for time your team actually bills to clients, and it is the single biggest lever on an agency’s profitability. Dividing your revenue target by the average billable rate gives the billable hours you need; dividing that by total available capacity gives the utilization those hours demand. If the answer is above 100% the target simply is not reachable with the current headcount and rate — you either raise prices, hire, or lower the goal.
Worked example
A five-person team with 1,800 available hours each has 9,000 hours of capacity. A $600,000 target at a $120 blended rate needs 5,000 billable hours — that is a 55.6% utilization requirement (5,000 ÷ 9,000), comfortably feasible, since full capacity would bill $1.08M.
Frequently asked questions
What is a healthy utilization rate?
Most agencies target 70–85% billable utilization for delivery staff, leaving room for sales, admin and professional development. Rates pushed toward 95%+ are usually unsustainable and drive burnout and quality problems.
Why isn’t 100% utilization the goal?
Fully billed teams have no slack for pitching new work, internal projects, training or absorbing a sick day. A little unbilled time is the buffer that keeps the business running, so a realistic target sits well below 100%.
Should support staff be counted?
No — only include people who bill client work in your headcount here. Account managers and operations staff are overhead their billable rate has to cover, not extra capacity.
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Educational estimate, not financial advice.