What is full-time equivalent, and how to calculate FTE?

If an organization considers full-time to be a 40-hour working week then one full-time employee will count as 100% FTE. 100% FTE can also be achieved in several other ways, for example, through two part-time employees (who each work 20 hours per week) or four employees who work 10 hours per week. Rather than hiring new employees, businesses can use FTE to deploy staff across various departments thereby keeping costs down. Depending on the type of work that is required, management can decide the number of full-time employees that are needed for a particular project and assign employees to those positions accordingly. It could require 15 full-time employees (600 hours/40 hours) five days to complete, 30 part-time employees five days to complete, one full-time employee 15 weeks to complete, or a combination of these.

• The ACA legally requires that employers, individuals, and the government each help offer insurance to as many people as possible.
• The underlying period can be, for example, a day, a month or even a year.
• Essentially, the FTE is the number of determined full-time positions in an organisation.
• It is a way of adding up the hours of full-time, part-time and various other types of employees into measurable ‘full-time’ units.
• Saviom also provides tools for project portfolio management, professional service automation, and workforce planning software.

Full-time equivalent (FTE) is the number of working hours spent by one full-time employee during a fixed period, which may be one week, one month, or, for example, one year. This method determines how many full-time employees are working in the company.Calculating FTE simplifies the project schedule, as it helps to plan the number of people required to complete a particular task. It also impacts the calculation of labor costs and forecasts project budgets for the future.

Enhances accuracy in planning

0.5 FTE is typically used for positions such as project managers, supervisors, overheads, and strategists, where it isn’t necessary to be present for the entirety of the workweek, as the job can be done in fewer hours. Horizons can support your business by helping you hire full-time employees anywhere in the world. Whether you are looking to expand your business internationally, outsource your operations, or take on more remote staff contact us today to discuss your needs. The FTE is calculated by taking into account the number of hours worked in a full-time weekly schedule and the actual number of hours employees work. With the variety of working options available today some employees may work part-time while others may only work at certain times of the year or in several other flexible ways.

However, if your company employs part-time employees as well, several of them together may equal 1.0 FTE. To calculate the FTE for all employees in your company, consider the full-time and part-time employees you employ. The actual PTO an employee can accrue may depend on several factors, including years of employment that dictate an employee’s hourly PTO accrual rate.

What penalties apply to companies that fail to meet the mandate?

Once you’ve calculated your employee FTE, you can see how many part-time employees it takes to complete the same workload as a full-time employee. When a business employs a significant number of part-time staff, it can be useful to convert their hours worked into full time equivalents, to see how many full-time staff they equate to. The FTE concept is used in a number of measurements that compare headcount to revenues, profits, or square footage. The concept is also useful for comparing headcount levels among the firms within an industry, as part of an industry analysis.

• The 109,000 total hours worked must be divided by the total number of available work hours in a year, or 2,080 hours.
• The calculation is straightforward — enter the number of full-time employees together with the total number of hours worked by part-time employees per week.
• A full-time equivalent assists in tallying work hours, salaries, employee productivity, and company’s or workplace’s productivity, as well as calculating how much time an assignment or a project will take.
• However, it will be up to you to decide how many people you’ll want to employ to carry this out and what type of employment you will offer them.
• Globalization Partners’ global employment platform streamlines worker classification and ensures your company is compliant in key areas like employment contact generation and payroll.
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A part-time employee’s FTE salary is calculated by multiplying their FTE value by the salary allotted to an equivalent full-time employee. Say a full-time graphic designer at a company makes 48,000 dollars a year, amounting to around 923 dollars for each workweek. Meanwhile, a part-time or contract graphic designer at the same company works 22 hours per week.

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To delve further into the matter, let’s look at how FTEs are calculated. FTE  refers to one full-time employee or the equivalent of a full-time employee. 100% FTE or 1.0 FTE refers to one fte meaning full-time employee or a number of people who make up the duties of one full-time position. Clockify is a time tracker and timesheet app that lets you track work hours across projects.

You’ll also need to know the actual number of weekly work hours to complete the FTE calculation. Actual hours worked per week is the exact number of hours an employee worked. However, you’d want to average those hours over a time period such as four months. This ensures that you’re not getting a skewed result based on a higher or lower number of hours worked in a week than typical.

Keeping FTE ACA-Compliant: What You Need To Know

Whereas, employees that works 20 hours per week are considered 0.5 FTEs. The 40-hour workweek calculation is applicable if you are doing the math for accounting and business purposes. If you increase your opening hours and are open every day of the week, then you have a 0.875 FTE.

The number of employees, size, operations, the scope of the project, and more are factors each employer may consider in choosing which method to use to calculate FTEs. Part-time employees may feel overlooked because they can not deliver the same amount of work as their full-time counterparts. Do you want help with the management of your company’s key figures, helping your team make the right decisions, and implementing the right measures in personnel planning?

Who is considered an FTE employee?

However, determining the FTE for Jimmy and Marta requires calculation. Your FTE calculations must be accurate for IRS and Department of Labor (DOL) reporting. At 50 FTEs, you’re required by the ACA to provide health insurance to your employees and by the FMLA to allow employees to take up to 12 weeks of leave for qualifying conditions. With so many employment intricacies, it’s crucial you clearly distinguish between each type of employee, especially if you’re managing a large global team. Globalization Partners’ global employment platform streamlines worker classification and ensures your company is compliant in key areas like employment contact generation and payroll.

Within this method, the employee is credited with 40 hours for each week when payment was due (including PTO). Bear in mind that these are just simple FTE example calculations — project managers approach FTE from a different angle while federal programs use different FTE calculation methods. When classifying FTEs and working hours in your company’s policy, you can follow suit, or define your own FTE measurements. https://www.bookstime.com/ Whether an FTE of 0.75 is considered full-time will depend on the company policy made by the employer. If 0.75 FTE is considered full-time in a company, such employees may qualify to apply for the Public Service Loan Forgiveness (PSLF) program, as stated above. There are companies that have a significant number of people working part-time, i.e., workers who spend only a short time in the company.