Capacity Planning Template
Hours you have against hours the work needs, and the gap in between.
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For the period [date] to [date].
1. Hours available
| Name | Role | Hours |
|---|---|---|
| [add one person per line] |
2. Hours needed
| Activity | Hours |
|---|---|
| [add one activity per line] |
What is a Capacity Plan?
A capacity plan sets the hours a team actually has against the hours the committed work needs, and shows the gap between them. It turns we are stretched into a number someone can act on. Without it, overcommitment stays invisible until a deadline slips, and the conversation about hiring, descoping or moving a date happens after the damage instead of before it. The gap is the entire point of the document.
Agencies and professional services firms build one each month to see whether the sold work fits the billable hours available. Engineering and product teams build one per quarter or per sprint. Support desks, clinics, warehouses and production lines run the same arithmetic against tickets, appointments, orders or units instead of hours. It is also the document a team lead takes into a hiring conversation, because a request for another person lands very differently when it arrives as a quantified shortfall rather than a complaint.
The available-hours figure is constrained by law, not only by preference. Statutory leave entitlements, weekly working hour limits, rest breaks and overtime rules all reduce or price the hours you can plan for, and they differ: the EU and UK working time rules on weekly hours and rest, Australia's National Employment Standards on maximum weekly hours and reasonable additional hours, the state Shops and Establishments Acts and the Factories Act in India, and overtime obligations for non-exempt employees under the US Fair Labor Standards Act. Collective agreements and individual contracts can be stricter. Check the current entitlements before planning to a number.
A capacity plan is not a schedule. It says the team has room for a given number of hours next month; it does not say who does what on Tuesday, and it will mislead you if read that way. It is not a budget, though it feeds one, and it is not a commitment to a delivery date. It also treats hours as interchangeable, which they are not — two hundred spare hours are useless if none of them belong to the only person who can approve the design.
What to put in a Capacity Plan
These are the details this template asks for. Anything left blank is marked in red on the preview so you can see what is still missing.
| Field | What goes in it |
|---|---|
| Issuing organisation | For example: Maple Grove Homeowners Association |
| Organisation address | For example: 1420 Kinnear Road, Columbus, OH 43212 |
| Period from | Free text |
| Period to | Free text |
| People and available hours | One per line: Name | Role | Hours available |
| Work to be covered | One per line: Activity | Hours needed |
How to write a Capacity Plan
Start from real available hours
Begin with each named person and their contracted hours for the period, not headcount multiplied by a standard week. Part-time contracts, a notice period ending mid-month, someone starting on the twelfth and a shared resource split across two teams all change the number. Put the names in rows, because a total hides the person who is only with you two days a week.
Subtract leave, holidays and fixed commitments
Take out booked annual leave, the public holidays for the location each person sits in, training days, and the standing meetings that are not going away. Subtract known absence patterns where you have them. This is where most plans quietly break: the plan assumes four working weeks when the calendar shows one of them is a holiday week in one of your two offices.
Apply an honest productive-time factor
Nobody delivers project work for every contracted hour. Email, interruptions, recruitment, support duty and admin take a real share, and the proportion differs by role — a team lead may have half the delivery time of the person sitting next to them. Use a figure you can defend from your own timesheets or observation rather than a borrowed benchmark, and write the assumption down so it can be argued with.
List demand as named work with hours
Every committed item, with an estimate of effort and the month it lands in. Include the invisible demand: warranty and support on things already shipped, the compliance work someone has promised, onboarding a new joiner. Work with no hours against it will be treated as free. Keep committed and likely work in separate columns rather than blending them into one figure.
Show the gap and the options
Put supply, demand and the difference on one line, in hours, then set out the three ways to close it: reduce scope, move a date, or add people, each with its cost and its lead time. A plan that only reports a shortfall gets sympathy. A plan that prices the alternatives gets a decision, which is the reason to write it at all.
Common mistakes
- Planning to full utilisation, which leaves no absorption for illness or rework and turns a single absence into a missed deadline.
- Using headcount multiplied by a standard week, which overstates capacity by the whole of the leave, holidays and admin the team will actually take.
- Counting a person who sits across two teams at full availability in both plans, so the same hours are effectively sold twice.
- Leaving support and maintenance out of demand, so it consumes the buffer before any of the new work has started.
- Building the plan once at the start of a quarter and never reworking it as leave is booked and scope changes, so it describes a team that no longer exists.
Frequently asked questions
How do you calculate team capacity?
Take each person's contracted hours for the period, subtract leave, public holidays and fixed meetings, then apply a productive-time factor reflecting how much of the remainder is genuinely available for the work being planned. Add the individual figures for the team total. Doing it per person rather than in aggregate is what catches part-timers, shared resources and locations with different holiday calendars.
What is a realistic utilisation rate?
It depends on the role and the sector, and the honest answer comes from your own timesheets rather than a benchmark. Delivery-only roles carry a higher figure than roles with line management, recruitment or support duty attached. Whatever you choose, write the assumption on the plan so it can be challenged, and revisit it when work consistently takes longer than the plan allowed.
What is the difference between capacity planning and resource planning?
Capacity planning asks whether there are enough hours in total; resource planning asks who does which piece and when. The first is arithmetic about supply and demand, the second is allocation and sequencing. Do them in that order, because assigning names to work before you know the total fits produces a schedule that was never achievable.
How do you account for holidays and leave in a capacity plan?
Subtract booked leave and the public holidays for each person's own location before anything else, then hold back an allowance for leave booked later in the period and for unplanned absence. Teams split across countries need separate holiday calendars; planning a distributed team against a single country's calendar is a common and expensive simplification.
How often should a capacity plan be updated?
Rebuild it at the start of each planning cycle and touch it whenever supply or demand moves materially — a resignation, a new joiner, leave booked, scope added, a project pulled forward. A monthly cadence suits most teams. The value sits in the gap it reports, and a gap calculated from last quarter's assumptions is not one anyone should act on.
This page explains general practice and is not legal advice. Requirements differ between countries and, in some cases, between states — check what applies where the document will be used.