It can reflect the billing efficiency or the overall productive use of an individual or a firm.
For example, if 32 hours of billable time are recorded in a fixed 40-hour week, the utilization rate would then be 32 / 40 = 80%.
If 50 hours of billable time are recorded in a fixed 40-hour week, then the utilization rate would be 50 / 40 = 125%.
Excluding absent hours can also help remove seasonality from utilization calculations.
For instance, an independent professional services or consulting firm may rely solely on billable utilization.