GPU Utilisation low when rendering video

You have only Nvidia hardware encoding and decoding, in that particular case. What Andy1968 stated is not applicable because your CPU, like all other HEDT CPUs, has no integrated GPU at all, and thus no QuickSync at all.

And I would dare say that the i7-6850K is a weakling of a CPU by current standards. In fact, despite its 6 cores and 12 threads it is not much more powerful these days than a 10th-Gen quad-core budget i3 CPU. As such, that 6850K borders on being too weak for that GTX 1080. The most recent system with that CPU in the PugetBench for Premiere Pro benchmark that produced a valid score (that is, no wonkiness with the GPU score) scored only a 344 in that test (and that is with the exact same GPU as yours) - clearly within the range of a typical quad-core CPU-based PC of a similar age. In fact, my old i7-7700 (non-K) quad-core PC actually beat that i7-6850K even with a lesser GPU than the GTX 1080 (in my case, a GTX 1060 6 GB), mainly due to the 6850K's rather poor live playback performance.

Jeff's answer is correct with certain gear, especially older CPUs. Andy is correct with other, newer CPUs.

As @RjL190365 can often illustrate,  it depends on both the generation of CPU and what specific bits it has. Some expensive CPUs actually were built without internal encoding/decoding special bits, and also don't work well with the GPU for H.264 while some cheap ones do.

So it always depends  ...

Neil

When rendering video (H.264, Hardware encoding) my GPU is hardly utilised, hovers around 3% and 17% whilst the CPU is usually pegged at 100%.

Are you rendering clips in the timeline or are you exporting an intermediate or final version?

Is this normal? Does the GPU utilisation only apply to certain work cases with certain effects applied?

Yes. The GPU handles accelerated effects while the CPU handles decoding/encoding.

Are you using 2-pass encoding?

Neil

Is your hard drive full?