Full-time Equivalent FTE Calculator

fte calculation

As you can see, the part-time employees are converted into the performance of a full-time employee. So the FTE is not the number of employees in a company, but the equivalent of a full-time employee. Because the number of employees says nothing about a company’s actual work performance. Five of them work full-time (40 hours per week), three occupy a part-time position each fte meaning working 20 hours a week, and the other two each work 10 hours per week. The full-time equivalent converts the hours worked by part-time employees into hours worked by full-time employees. FTE, an abbreviation for “full time equivalent”, counts the approximate number of full-time employees employed by a specific company, but with the inclusion of part-time employees.

  • Obviously, these multipliers only provide a rough estimate of your costs — and vary widely from the office to the factory floor.
  • ” — knowing full well that your part-time employees don’t work as many hours as your full-time employees.
  • FTE is a very specific term used to calculate whether a company is required to provide benefits under the Affordable Care Act (ACA) and the Family Medical Leave Act (FMLA), for example.
  • For the SBA calculation method #1, to get the FTE, enter the number of full-time employees and the total sum of work hours by part-time employees.

Step 6. Calculate the total FTE

To calculate the total FTE, add the number of FTEs worked by full-time employees (1 FTE for each full-time worker) to the part-time FTE you calculated in step five. To identify the FTE of part-time employees, divide the total hours worked by part-time employees by the annual hours worked by one full-time employee (i.e., 2,080 hours). Calculate the FTEs by determining the number of hours worked by full-time or part-time employees in a year. To do this, multiply the number of weeks in a year with the number of hours for a full-time position. A full-time equivalent (FTE) is a unit of measurement used to figure out the number of full-time hours worked by all employees in a business.

  • The list should include both part-time team members and full-time team members.
  • Next, add the total hours worked by full-time employees and the total part-time hours worked by part-time employees.
  • However, Revenue Per Employee figures allow you to see how much each employee (in a certain part of your business) contributes to revenues.
  • The company begins by calculating the number of hours worked by each group of employees.
  • The company adds up all the hours from each group of part-time employees.

How to Calculate Full Time Equivalent (FTE)

These two part-time employees will be considered one full-time employee. If a part-timer completes 10 hours a week, then four such part-timers will constitute one full-time employee. https://www.bookstime.com/s should be updated regularly to reflect changes in employee hours, staffing levels, and business needs. This could be done monthly, quarterly, or annually, depending on the organization’s requirements.

fte calculation

What is 75% FTE? When is 75% FTE or higher considered full-time?

FTE also includes the sum of employees who work less than 30 hours a week, where the aggregate of work hours of those employees is equal to at least a 40-hour workweek. Along with counting the hours worked, FTEs show how many full-time employees a particular company employs within a fiscal year or needs to employ to carry out a project. In general terms, full-time equivalent (or FTE) is a unit of measure that plays an important role in calculations used in businesses, project management, or federal programs for eligibility purposes. It is then important to note that some FTE calculations do involve a fair amount of assumptions.

Calculating FTEs for individual employees

Once you master this, you can use your knowledge to apply for corporate benefits, manage your employee’s time wisely, and project labor costs. If an employer has a 40-hour workweek, a worker scheduled for 40 hours per week is 1.0 FTE. Since both are considered to be full-time schedules in their respective companies, both count as 100% or 1.0 FTE. In practice, these numbers fall somewhere between 30 and 40 hours per week, with 40 hours per week (8 hours per day, 5 days per week) being the most common norm for a full-time schedule.

  • These rates will depend on the PTO accrual rate policies of a company, organization, or institution.
  • 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.
  • By determining your company’s overall FTE, you can plan in advance and manage your payroll expenses.
  • This means the combined work effort of all employees is equivalent to 12 full-time employees.

Full-time equivalents (FTEs) serve as a fundamental metric for assessing workforce capacity and optimizing resource allocation in organizations of all sizes and industries. By understanding how to calculate and interpret FTEs, businesses can make informed decisions regarding staffing levels, budgeting, and strategic planning. Additionally, FTE calculations give you a better sense of your current staffing levels so that you can plan and budget accordingly. Using time tracking software, like Homebase, will allow you to run a historical report based on employee work history and status to gather the average hours worked using custom fields. In addition, Homebase provides small business employers with a range of scheduling options to ensure your staff hours are within the correct range.

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fte calculation

The answer should be between hours a week per employee (when considering full time). 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.

Applying FTE for corporate benefits

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