Team capacity is the realistic amount of work a team can handle in a sprint, considering all factors that affect availability. While velocity looks at past performance, capacity focuses on the specific circumstances of the upcoming sprint. Capacity changes based on team size, planned time off, holidays, and non-project work like meetings or support tasks. A team that usually completes 40 story points might reduce their commitment to 30 points if two people are on vacation or working on an urgent production issue. Some teams calculate capacity first in hours by looking at available days, working hours per day, and time spent on non-development activities. They then convert to story points based on past patterns.

Others simply adjust their average velocity based on who's available for the upcoming sprint. Tracking capacity alongside velocity shows important patterns.

When teams consistently deliver less than their expected capacity, it often points to problems like too many meetings, frequent task switching, or untracked support work taking up development time. Capacity planning prevents teams from taking on too much work. It creates a sustainable pace by recognizing that a team's ability to deliver changes is based on real-world conditions.