FTE Calculation Methods: Understanding Full-Time Equivalents

how to calculate fte

Five of them work full-time (40 hours per week), three occupy a part-time position each working 20 hours a week, and the other two each work 10 hours per week. The full-time equivalent converts https://www.bookstime.com/ the hours worked by part-time employees into hours worked by full-time employees. Suppose a company currently has 50 full-time employees on its payroll, along with 10 part-time employees.

  • For the purpose of our calculations, we’ll assume that the sample company considers 40 hours per week full-time employment.
  • Actual hours worked per week is the exact number of hours an employee worked.
  • There’s a ton of flexibility that gives you the option to adjust with the scope of your project.
  • You can then determine the equivalent number of full-time workers you employ.
  • Ever feel like your days disappear faster than a magician’s rabbit?
  • 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.
  • It standardizes the total hours worked by part-time and full-time employees into the equivalent of a full-time position.

Step 3: Calculate employee hours worked for the month

The 20 full-time employees each work 30 hours a week for 52 weeks. Let’s take another example, assuming that the organization is calculating the number of FTE employees to determine whether it must provide health benefits under the Affordable Care Act. First, calculate the work hours for full-time employees by totaling all the hours worked by full-time employees. Rather than simply looking at the number of employees a company has, FTE calculations consider the hours that employees work. After you have all your employees’ work hours in one place, make sure you follow the steps in the fte meaning for your company? Since Clockify basically did most of the job by tracking your employees’ work hours — the other part of the FTE calculation will be quite straightforward.

  • This means that in May you can actually offer your clients 59 full-time employees, even though you might think you have 70 of them.
  • An FTE of 100% is equal to the amount of work one full-time employee performs within a given time period (a day, week, month, or year).
  • This number can help you apply for critical corporate benefits, make important staffing decisions, or predict labor costs.
  • The chart below displays the number of weekly hours worked with the corresponding FTE under the standard 40 work-week.
  • Amir, Mark, Phyllis and Sue could each work 10 hours per week and the total would be 40 hours worked, or one FTE based on a 40-hour workweek.

Full Time Equivalent Formula

how to calculate fte

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Various FTE formulas accommodate different timeframes and employee types. For weekly calculations, FTE equals total hours worked divided by standard weekly hours (e.g., 40 hours). Monthly FTE is total hours divided by standard monthly hours (e.g., 160 hours). Yearly FTE divides total hours by standard yearly hours (e.g., 2,080 hours). Part-time and seasonal workers contribute to FTE by calculating their hours worked as a proportion of full-time hours. For example, if a part-time employee works 20 hours per week and standard full-time hours are 40, their FTE would be 0.5.

  • The actual workload is not taken into consideration for this calculation.
  • Understanding FTEs goes beyond just the mathematical calculation.
  • (For a year, that is 2,080 hours with 40-hour workweeks and 1,560 hours with 30-hour workweeks, which is considered full-time for ACA reporting).
  • When you add your part-timers together, you create an FTE employee.
  • Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 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.

What Is Full-Time Equivalent & How to Calculate It (+ Free FTE calculators)

An employer with a 35-hour workweek would simply divide the employee’s scheduled hours by 35 to determine the FTE. For example, an employee scheduled to work 21 hours per week would be 0.6 FTE when the full-time workweek is 35 hours. FTE calculations often focus on direct labor hours but may overlook indirect costs such as employee benefits, overhead expenses, and administrative overhead. Incorporating these factors into FTE analysis provides a more comprehensive understanding of total labor costs. Calculating FTEs for part-time employees can be complex due to variations in their work schedules and hours. It’s essential to accurately capture and account for part-time hours to avoid underestimating or overestimating FTEs.

To finalize calculations for part-time employees, simply add all work variation totals together to get one final total for part-time hours. The list should include both part-time team members and full-time team members. Be sure to detail the exact schedule or number of hours part-time employees worked, as this may vary from one part-time worker to another. A full-time equivalent (FTE) is a unit of measurement used to determine the amount of full-time hours worked by all employees in an organization. If a normal work week consists of 40 hours, an employee who works for 40 hours per week has an FTE of 1.0 while a part-time employee working only 20 hours per week has an FTE of 0.5. To identify the FTE for part-time positions, divide the total number of part-time hours worked by the number of hours worked by one full-time worker.

how to calculate fte

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  • The 109,000 total hours worked must be divided by the total number of available work hours in a year, or 2,080 hours.
  • Organizations that have more than 50 FTEs over the course of the year are ALEs.
  • This will give you your total FTE for all full- and part-time employees for the year.
  • With this FTE Calculator, you can quickly calculate how many full-time equivalent employees are on your team.
  • If you want your PPP loan to be completely forgiven, you need to keep the number of FTEs during the 24-week PPP period the same as it was prior to COVID-19.
  • Running an organization can be like conducting a well-coordinated symphony, especially when it comes to maintaining a 12-hour working schedule,…

FTEs calculator for the Paycheck Protection Program (PPP)

Reasons for determining FTE