Hallucination Rate

Hallucination rate is the percentage of an AI system's outputs that contain fabricated or unsupported claims, measured over a defined sample.

It is calculated by scoring outputs for groundedness, by LLM judge, human review, or both, and dividing flagged outputs by total outputs. Production teams track it per agent, per version, over time, and alert when it regresses. Acceptable thresholds vary by use case: an internal copilot can tolerate a higher rate than a customer-facing or regulated agent, where even low single-digit rates may be unacceptable.

Closely related concepts include Groundedness, Agent Grading Rubric, Evaluation Harness (Agent), Human Preference Annotation. Each is defined in the Prefactor glossary.