An allocation is the commitment of a resource (work or material) to be available to work on a task in a task plan. A resource allocation is an agreement between a resource manager and a project manager as to a resource's availability to work on a work item.

An allocation can be similar to an assignment, but only if the allocation is made at the task level and for a single resource. More commonly, allocations are made as teams; a group of resources (for example, 4 developers, 3 testers, and a technical writer) are assigned to a task plan and then are assigned to individual tasks by a project manager.

However, an allocation is only the commitment of a resource to work on one or more tasks. A resource must be assigned to a task in order for a resource to be able to report progress on that task in their timesheet.

Resources can become overallocated. This occurs when a resource has been assigned to do more work in the time that resource has available to complete that work. For example, if two tasks in a task plan overlap on a single day, but the same resource is assigned to 100% on both tasks. On the overlapping day, the resource is overallocated (100% on two separate tasks). Overallocations can occur when: