Utilisation and chargeable hours targets: what NZ firms should measure

The formula, and the hours a year really holds

The formula is simple: chargeable hours in a period, divided by available hours in the same period. The hard part is the denominator, because the Holidays Act 2003 takes a fixed share of every year away before anyone sits down to work:

The 12 public holidays are the 11 national ones plus your regional anniversary day. For someone who works Monday to Friday, the ones that land on a weekend move to a weekday under sections 45 and 45A, so in practice all 12 come out of the working year. Sick leave is 10 days a year once someone has been with you six months (sections 63 and 65); replace the assumed 5 with your own average.

Which denominator you use changes the answer, so write it beside the figure. In this made-up example, 1,250 chargeable hours is 70.1% of 1,784 available hours, 60.1% of 2,080 paid hours, and 65.8% of 1,900 hours actually worked by someone who put in regular extra time. The last version is the one that shows whether long weeks are hiding a low rate. Our article on charge-out rates for staff uses the same 1,784 hours to work out what each billed hour has to earn.

From 6 August 2028, the Employment Leave Act 2026 replaces the Holidays Act, and annual leave builds up at no less than 0.0769 of an hour for each standard hour (section 24): 159.952 hours on 2,080 standard hours, so the table barely moves.

Realistic targets by role

No law or official body sets a utilisation target, and published figures from other countries and other kinds of firm rarely fit a New Zealand practice. The numbers below are made-up examples to show the arithmetic, not benchmarks:

Targets usually fall with seniority because senior people spend more time on work no client pays for directly: winning work, supervising and reviewing, managing staff and running the practice. A graduate's target needs room for study too. If they are working towards a professional qualification, take the study and exam time out before setting the target, or it will look like a shortfall every exam season.

The best starting point is your own history. Record everyone's time, chargeable and not, for three months, work out each role's actual utilisation, and set targets a little above it where the work is there. A target nobody has met in a year of records is a wish, and pressure to meet it tends to come out as unrecorded hours.

Recording non-chargeable time honestly

Utilisation is only as good as the non-chargeable side of the record. If people log client work carefully and leave everything else blank, the denominator is a guess and the measure flatters itself. Set non-chargeable work up as projects of its own, so it is recorded with the same care:

• Admin and practice management, including timesheets, billing and internal meetings.
• Business development, such as proposals, pitches and client relationship time that is not billed.
• Training and professional development, including study for professional exams.
• Supervision and review of other people's work that you do not bill.
• Written-off client time, recorded against the client and marked as not chargeable, so you can see which jobs overrun.

Keep chargeable time and billed time apart. Utilisation counts hours that could be charged; how many of those hours the client ends up paying for, after write-offs and fixed fees, is a separate measure, and mixing them hides where the problem is.

Salaried staff, long weeks and the minimum wage check

Most professional firms pay salaries, and a salary does not switch off the minimum wage. Section 6 of the Minimum Wage Act 1983 entitles every worker to at least the minimum rate for their work, which is $23.95 an hour for adults from 1 April 2026. Under section 130(1C) of the Employment Relations Act 2000, a salaried person's usual hours can stand in for the daily record, but section 130(1D) requires you to record any extra hours needed to show you met minimum entitlements, and section 4B requires records detailed enough to prove it.

Employment New Zealand suggests checking a salary by dividing the pay for a pay period by the hours worked in it. This made-up example is arithmetic: a graduate on $55,000 a year, paid fortnightly, earns $2,115.38 a fortnight. Over 80 hours that is $26.44 an hour. Over 92 hours, a 46-hour week during a deadline, it is $22.99, below the minimum wage. The line is about 88 hours a fortnight.

A high chargeable target is exactly what pushes a graduate to that line. If a target can only be met with long weeks, the shortfall is in the target, not the person, and the extra hours need to be in the record whether or not they are chargeable.

Using hours by client and task without it feeling like surveillance

Time recording works when people trust what it is for. Tell your team plainly why you record hours (pricing, scoping, workload and the minimum wage check) and what you will not do with them. Report utilisation to the team as a trend, discuss individual figures one to one, and look at hours above the target as closely as hours below it. Our article on team timesheets without micromanaging covers the privacy side.

Team timesheets from jobtracker.co.nz shows the hours your people choose to share, by person, project and task, for any period. Set up each client as a project and each stage as a task, add projects for admin, business development and training, and mark each project and task billable or not; the billable CSV then gives you the chargeable hours, and the full CSV the hours worked. It does not work out utilisation for you, and the Owner and Admins alone see value, cost and margin from the team's own rates, never the pay or rates in anyone's own account. Our page on Team timesheets for professional services shows how a practice sets it up. It costs $6.99 a seat a month, GST included, for at least three seats.

Chargeable and non-chargeable hours, both recorded