An interview question I always liked to use (with agile coaches, engineering managers, product managers, as well as potential clients) to see how they felt about capacity allocation is the following (mind you, there is no right answer, I was mostly looking to see how they thought):

Your team can deliver 5 units of work in the following commitment period, and from the backlog we have allocated 4 units with unanimously agreed upon top priority/impact tasks.

The 5 units scale nicely to any metric you use (velocity, man hours, etc) and is not the focus here. Similarly, all the P1 items have been allocated, so all that remain are lower impact/priorty tasks. I try not to lead the question with any more than a “what now?”.

People will generally focus on one of two different lines of reasoning. They will either try to find a way to allocate that remaining 20% of capacity, or they will try to defend why the team should be allowed to keep that 20% slack. Naturally, the correct answer will depend an awful lot on further contextual information, but without anything else being given I’m a strong believer in the philosophy of the latter camp.

The reasoning is simple, your team should do the highest priority tasks. Anything they’re given that is less than that will detract from doing those P1 tasks to the best of their ability. Even if nothing surprising comes up and the team has 20% extra time, that time is often better spent letting the team address technical debt or improving their knowledge.