TACE for IT Services: How to Calculate and Optimize Billable Rate in 2026

TACE (Activity Rate Excluding Leave) is the key performance indicator for any IT services company. This guide explains how to calculate it, optimize it and improve it in 2026.

What is TACE?

TACE (Activity Rate Excluding Leave) measures the percentage of billable time over total available time for the company, excluding leave.

Basic formula:

TACE = (Billable time / Total available time excluding leave) × 100

Important: TACE excludes leave from the calculation, giving a clearer picture of actual activity.

Why TACE Matters

TACE directly affects:

• 💰 Profitability of your company
• 📈 Growth potential
• 🎯 Ability to invest
• 👥 Team compensation

Example:

• Company with 65% TACE: Limited margin, growth constrained
• Company with 80% TACE: Profitable, room for growth
• Difference: 15% TACE can mean +€150,000/year for a 50-consultant company

Detailed TACE Formula

Simple Calculation

TACE = (Billable hours / Available hours excluding leave) × 100

Example:

• Consultant available (excluding leave): 160 h/month
• Billable hours: 120 h/month
• TACE = (120 / 160) × 100 = 75%

Full Calculation (Recommended)

For accuracy, exclude leave from the denominator:

TACE = (Billable hours / (Worked hours + Absences + Training + Bench time)) × 100

Components:

• Billable hours: Time on billable client projects
• Worked hours: Total presence (excluding leave)
• Absences: Sickness, other absences (excluding leave)
• Training: Internal training time
• Bench time: Time between two assignments
• Leave: Annual leave, RTT, public holidays — excluded from TACE

How to Improve TACE

1. Reduce bench time: Proactive staffing, skills matching, pipeline of opportunities.
2. Limit non-billable time: Streamline admin (e.g. timesheet automation), optimize training.
3. Steer in real time: Use a timesheet tool with dashboards and alerts to act quickly.
4. Set targets: Define a TACE target (e.g. 80%) and track it monthly.

Next Steps

Use a timesheet solution that calculates TACE automatically and gives you real-time visibility. Discover TimeTrack for built-in TACE and profitability steering.