Quick Answer

A consultant working 40 hours per week at 70% utilization and a $125/hour rate bills 28 hours per week, generating $3,500 in weekly revenue.

Calculate Revenue from Hours

Total Hours per Week

Billable Percentage (%)

Hourly Rate ($)

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Calculate Hours from Revenue Target

Target Weekly Revenue ($)

Hourly Rate ($)

Billable Percentage (%)

Common Examples

Input	Result
40 hours/wk, 70% utilization, $125/hr	28 billable hrs, $3,500/wk revenue
45 hours/wk, 65% utilization, $100/hr	29.3 billable hrs, $2,925/wk revenue
35 hours/wk, 80% utilization, $150/hr	28 billable hrs, $4,200/wk revenue
$5,000 target revenue, $100/hr, 75% utilization	50 billable hrs needed, 66.7 total hrs, 1.7 weeks
$10,000 target revenue, $150/hr, 70% utilization	66.7 billable hrs needed, 95.2 total hrs, 2.4 weeks

How It Works

This calculator uses the billable hours and utilization formulas standard in consulting, freelancing, and professional services:

Billable Hours = Total Hours Worked x (Utilization Rate / 100)

Non-Billable Hours = Total Hours - Billable Hours

Weekly Revenue = Billable Hours x Hourly Rate

Utilization Rate = (Billable Hours / Total Hours) x 100

Where:

• Total Hours = all hours worked in a week, including both client work and non-client tasks
• Utilization Rate = the percentage of total hours that are billable to clients
• Billable Hours = hours spent on client work that can be invoiced
• Non-Billable Hours = time spent on administrative tasks, marketing, sales, training, and internal projects
• Hourly Rate = the rate charged per billable hour

Reverse Calculation (Hours from Revenue Target):

Billable Hours Needed = Target Revenue / Hourly Rate

Total Hours Needed = Billable Hours / (Utilization Rate / 100)

Weeks Needed = Total Hours / 40

This reverse calculation determines how many hours must be worked to achieve a specific revenue goal, accounting for the fact that not all hours are billable.

Understanding Utilization Rate

Utilization rate is a critical metric for service businesses. It measures the efficiency of converting available working time into revenue-generating time. Industry benchmarks for utilization rates vary: consulting firms typically target 65% to 80%, law firms aim for 70% to 85%, and solo freelancers often achieve 55% to 75%. A higher utilization rate generates more revenue per total hour worked, but pushing utilization too high can lead to burnout and reduced quality.

Common Non-Billable Activities

Non-billable time includes activities essential to running a service business but not directly chargeable to clients: responding to emails, creating proposals, invoicing, bookkeeping, marketing, networking, professional development, and internal meetings. Tracking non-billable time helps identify opportunities to improve utilization.

Worked Example

A freelance consultant works 40 hours per week with a 70% utilization rate and charges $125/hour. Billable hours = 40 x 0.70 = 28 hours per week. Non-billable hours = 40 - 28 = 12 hours per week. Weekly revenue = 28 x $125 = $3,500. If the consultant wants to earn $5,000 per week instead at the same rate and utilization: billable hours needed = $5,000 / $125 = 40 hours. Total hours needed = 40 / 0.70 = 57.1 hours per week. That is equivalent to 57.1 / 40 = 1.4 work weeks, meaning the revenue target requires either more hours per week or a higher rate.

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Frequently Asked Questions

What is a good utilization rate?

Most service professionals target 65% to 80% utilization. Rates below 60% may indicate too much time on non-billable tasks or insufficient client demand. Rates above 85% are difficult to sustain and leave little time for business development, training, and administrative work. The optimal rate depends on business model and growth goals.

What counts as a billable hour?

A billable hour is any hour of work that can be directly charged to a client. This includes project work, client meetings, research conducted for a specific client engagement, and other activities specified in the service agreement. Administrative tasks, marketing, internal meetings, and general professional development are typically non-billable.

How do I increase my utilization rate?

Common strategies include automating administrative tasks, batching non-billable work into specific time blocks, using project management tools to reduce overhead, outsourcing bookkeeping and invoicing, and streamlining proposal and sales processes. However, some non-billable time is necessary for long-term business health.

What is the difference between billable hours and productive hours?

Productive hours include all meaningful work, whether billable or not. Writing a blog post, updating a portfolio, or attending a training course are productive but non-billable. Billable hours are the subset of productive hours that generate direct client revenue. Both metrics matter, but billable hours directly drive revenue.

How does the reverse calculation work?

The reverse calculation starts with a target revenue, divides by the hourly rate to find billable hours needed, then divides by the utilization rate to find total hours needed. For example, earning $5,000 at $100/hour requires 50 billable hours. At 70% utilization, that requires 50 / 0.70 = 71.4 total hours. This helps evaluate whether a revenue target is realistic within available working hours.