**Source:** https://heykiku.com/glossary/utilization-rate

# Utilization Rate

Utilization rate seems simple: billable hours divided by total available hours, times 100. A designer who bills 30 hours out of 40 available has 75% utilization. But beneath this simple formula lies one of the **most important—and most misunderstood**—agency metrics.

The first challenge is **defining what counts as billable**. Is internal creative development billable? What about client calls that run long? How do you handle time spent fixing problems caused by unclear briefs? Without documented definitions, utilization data becomes unreliable.

The second challenge is tracking accurately. When timesheets are confusing, submitted late, or require guessing about past work, **the data becomes garbage**. Clean utilization tracking requires clear categories, easy logging, and processes that make accurate tracking the path of least resistance.

Understanding your utilization requires context. Different roles have different targets. Account managers might aim for 60% because of relationship management overhead. Designers might target 80%. Knowing what's healthy requires **documented benchmarks and historical data** you can actually find and analyze.

## Related terms

- [Retainer](https://heykiku.com/glossary/retainer)
- [Rate Card](https://heykiku.com/glossary/rate-card)