How to work out your utilisation rate
The share of your working time that is billable. Usually far lower than people assume, and that gap is priced into your rate whether you calculated it or not.
Utilisation is billable hours divided by available hours. It sounds like a corporate metric and it is the number that determines whether your rate works.
Step-by-step
- Enter your working days and hours.
- Enter holiday, illness and training.
- Enter time spent on non-billable work.
- Read your utilisation and true billable capacity.
What realistic looks like
60–70% is good for an established freelancer. 50% is common when starting out or when selling takes more time. 85% is unsustainable and usually means either no business development is happening or the figures are not being recorded honestly.
A consultancy typically targets 60–75% for delivery staff, and that is with dedicated people doing the selling and administration you do yourself.
Where the rest goes
- Selling — proposals, calls, follow-up.
- Marketing — website, writing, networking.
- Administration — invoicing, accounts, email.
- Learning — which is not optional in most fields.
- Gaps between projects, which are rarely zero.
Higher utilisation is not the goal
Pushing utilisation up by cutting business development produces a good quarter and a bad year — the pipeline empties with a lag, and by the time the gap appears it is too late to fill.
The healthier lever is usually the rate. Raising it by 20% at 60% utilisation is better than raising utilisation to 72% and having nothing lined up.
Frequently asked questions
What is a good utilisation rate?
60–70% for an established freelancer. Anything above 80% sustained usually means business development has stopped, which shows up as a gap a few months later.
Should I try to increase utilisation?
Only up to a point. Beyond it you are cutting the selling and marketing that fills next quarter. Raising your rate is usually the better lever.
How does utilisation affect my rate?
Directly. Your rate must cover the whole year from billable hours alone, so a lower utilisation requires a higher rate for the same income.
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