How to Calculate a Full-time Equivalent Employee Examples

A typical 80-hour biweekly pay period is just like the 40-hour week. This is nice and easy to calculate an FTE for a single day, but hardly practical given all the various schedules people work and lack of insight from just a single day's worth of data. But the math to calculate an FTE for a single day is still correct, and the same for any other period. Calculating full-time equivalent for your business can be time-consuming if you currently process your payroll and employee benefits manually. Now, the exact number of hours that a 100% FTE represents will depend on your company’s policies and the various labor laws in your state, country, and more. With FTE, you can get a clearer picture of how your employees are performing in their jobs.

• So, each of your part-timers count as a fraction of a full-time employee.
• Whether an FTE of 0.75 is considered full-time will depend on the company policy made by the employer.
• FTE for one full-time employee equals 1, for 3 employees, equals 3.
• Divide your total hours (200) by 40 hours to get the number of full-time equivalent employees for the week.
• Using the full time equivalent calculation, it’s possible to identify crucial organisational needs, like whether your company needs to restructure, hire or reduce staff.

FTE calculations can also help track salaries and labor costs within the organization. For example, HR departments can use FTE calculations to standardize the working hours and salaries of employees working on a part-time basis. So, workers who work 20 hours in a standard 40-hour workweek are 0.5 FTE because they’re working half the time of full-time workers.

FTE Calculator

A full-time position would equate to around 30 to 40 hours per week for most employers. If a company considers 40 hours per week as the basis for a full-time position, then anyone working an amount of hours below this range is considered a part-time employee. The same logic is applied if a company considers 30 hours per week as the standard for a full-time position. A full-time equivalent (FTE) is a unit of fte meaning measurement used to figure out the number of full-time hours worked by all employees in a business. If your business considers 40 hours to be a full-time workweek, then an employee working 40 hours per week would have an FTE of 1.0. In contrast, a part-time employee working only 20 hours per week would have an FTE of 0.5—which shows that their hours worked are equivalent to half of a full-time employee.

That’s where FTE comes in because you can use the FTE calculation to assign a certain number of employees to departments within an organization, depending on each respective department’s work needs. If you want to save time, why not use our free full time equivalent calculator template for excel to easily work out your company’s FTE. Get https://www.bookstime.com/ up and running with free payroll setup, and enjoy free expert support. If you take out a PPP loan, your lender looks at your FTE employee headcount (as well as what you spent the money on and employee salaries) during the covered period to determine loan forgiveness. Number of employees simply means number of employees hired overall.

The Importance of Determining FTEs

For all these reasons, it’s important to you learn to calculate full-time equivalent employees accurately. Planning a new project and making estimates can be tiresome, especially when you have employees with different types of contracts (part-time, full-time, and freelancers) working for your company. FTE calculations make it easier for you to assign different personnel to different projects or specific tasks based on their overall performance and contribution to your company.

This way, you will be able to determine the number of full-time equivalent workers in your company even when you have part-time workers on-site. Therefore, eligible employees may obtain affordable and minimum health insurance coverage thanks to FTE calculations under the Affordable Care Act. Any employee having at least 30 working hours per week (or 130 a month) is considered a full-time employee under this act.

How do you convert FTE to hours?

All the above-mentioned factors end up costing the company something and affecting its bottom line. FTE is an important calculation for businesses that need to keep track of organizational costs, efficiency, overtime hours, work output, and the overall strain on certain departments. If you’re not sure where to start to track FTE, consider using QuickBooks Time , which helps organize employee hours and delivers helpful insights into your FTE calculation.