Margin One
What Is a Healthy Technician Billable Utilization Rate?
Healthy technician billable utilization is 60 to 75 percent or higher; it is the share of paid hours that actually earn revenue, and it drives your labor cost.
By John
A healthy technician billable utilization rate is 60 to 75 percent or higher. It is the share of paid hours that are actually billable to customers, after drive time, shop time, and downtime. Low utilization is exactly why loaded labor costs far more than the wage suggests. This benchmark comes from the Home Services Metrics Scorecard that M1COS dashboards run on.
A healthy technician billable utilization rate is 60 to 75 percent or higher. That is the share of paid hours your techs actually spend on billable work, after drive time, shop time, restocking, training, and slow days.
Billable Utilization = Billable Hours ÷ Total Paid Hours
A tech paid for 40 hours who bills 26 of them is at 65 percent utilization. The other 14 hours are real, you paid for them, they just did not earn revenue directly. Utilization measures how much of your labor payroll converts into billable output.
This is one of the most underrated numbers in the trades because it silently sets your labor cost. Every unbillable hour has to be paid for by the billable ones. That is why loaded labor cost divides by utilization: at 60 percent, a $35/hr tech costs about $76 per billable hour, and if utilization drops, that number climbs. Improve utilization and the cost of every billable hour falls without touching wages.
| Utilization | What it tells you |
|---|---|
| 75%+ | Strong: dispatching and routing are tight |
| 60 to 74% | Healthy band for most shops |
| Below 60% | Labor cost is inflating; look at scheduling and drive time |
Where utilization leaks: inefficient routing that piles on drive time, gaps between jobs from loose scheduling, techs waiting on parts, and admin work that could be handled elsewhere. None of it shows up as a line item, which is exactly why it goes unmanaged.
The common mistake is treating a busy-looking crew as a productive one. A tech can be paid full-time and still sit at 50 percent utilization if half the day is windshield time and shop runs. Track the ratio, not the appearance of busyness.
This benchmark comes from the Home Services Metrics Scorecard, the KPI catalog the M1COS dashboards run on.
Utilization and labor cost are two sides of one coin, so read this with What Is Loaded Labor Cost?. To see how utilization flows into what a job actually costs, run the Job-Costing Calculator, and use the Margin Leak Check to spot where paid hours are disappearing.
FAQ
What counts as a billable hour?
Time a technician spends on work you can charge a customer for. Drive time, shop time, training, and waiting on parts are paid but not billable, and they pull utilization down.
Why does low utilization raise my labor cost?
Because unbillable hours still get paid, and that cost has to be recovered from billable hours. Fewer billable hours means each one carries more cost, which is why loaded labor cost divides by utilization.
Is 75 percent utilization realistic?
Yes, with tight dispatching and routing. Most well-run shops live in the 60 to 75 percent band. Consistently above 75 percent is strong; below 60 percent signals scheduling or drive-time problems.
Want these numbers on your actual books? Book a call.