Free tool for agency managers
Billable Hours Calculator
Model hourly rates, utilization, and overhead to see how much revenue and margin each billable employee produces. Built for agency and consultancy owners who need to defend pricing and staffing decisions with numbers.
Inputs
Per person
- Available hours / year
- 1,840 h
- Billable hours / year
- 1,380 h
- Non-billable hours / year
- 460 h
- Revenue
- $207,000
- Fully loaded cost
- $117,000
- Gross margin
- $90,000
- Gross margin %
- 43.5%
- Break-even hourly rate
- $85
Team of 1
- Team revenue
- $207,000
- Team gross margin
- $90,000
How to read the numbers
Utilization is the lever most owners underestimate. A 10-point drop, from 75% to 65%, erases roughly 190 billable hours a year per person. At $150/hr that is $28,500 in lost revenue before you touch the rate card. Before you raise prices, check whether your team is actually shipping the hours you sold.
What counts as billable
Client-facing delivery, discovery, revisions inside scope, and anything a client signed off on. Internal meetings, sales, training, and admin are non-billable — track them separately so you can see where the leaks are. Our billable vs non-billable guide covers the categorization rules in more detail.
Stop calculating in spreadsheets
Klokka tracks billable and non-billable time per project, computes utilization by team and by client, and turns the numbers above into live dashboards and invoices — without asking your team to remember timers.
Frequently asked
What is a good billable utilization rate?
Most healthy agencies target 70–80% billable utilization for delivery staff. Below 60% usually signals under-selling or bench time; above 85% signals burnout and quality risk.
How do I calculate billable hours per year?
Start with 52 weeks × weekly hours, subtract PTO, holidays, sick days, and internal work, then multiply by your target billable percentage. A 40h/week employee with 4 weeks off and 75% utilization yields roughly 1,440 billable hours per year.
How much revenue should one billable employee generate?
Annual revenue equals billable hours × effective hourly rate. A senior consultant at $150/hr and 1,400 billable hours produces about $210,000 in revenue. Compare against fully loaded cost (salary × 1.3–1.4) to see margin.