How to Calculate the Full Time Equivalent FTE in 4 Steps

full time equivalent

The same is true for a 0.5 unit — it can be made of one part-time employee working for 20 hours or four employees working five hours. Full-time equivalent is a way to keep track of your staff and workload. It’s primarily used to compare part-time hours to full-time hours to see how many “full time” employees you end up with. fte meaning It can also be used to determine workload and how much staff you have, as you can include full-time employees in your FTE calculations. Once an employer has their definition, they can use it to classify each of their employees as part-time or full-time. For instance, let’s say they define a full-time workweek as 40 hours.

It represents a single full-time employee or multiple part-time employees whose hours add up to one full-time employee’s hours. The annual hours for your part-time employees (C, D, and E) add up to 3,120 (1,560 + 1,040 + 520). The annual hours for your full-time employees (A https://www.bookstime.com/articles/bookkeeping-for-ebay-sellers and B) add up to 4,160 (2,080 x 2). Employers may use the FTE calculation for different purposes, such as benchmarking revenues or profits per employee. Converting hours worked by part-time employees into full-time equivalents can be helpful when calculating these metrics.

How to Calculate the Full Time Equivalent (FTE) in 4 Steps

Such calculations facilitate accounting processes such as estimating wages, payroll, costs, etc. The full-time employees work 40 hours per week and 52 weeks out of the year, meaning that the number of full-time hours worked on an annualized basis is 104,000 hours. 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). Next, add the total hours worked by full-time employees and the total part-time hours worked by part-time employees. The gender pay gaps are not measurements of whether men and women carrying out the same work are being paid different rates.

  • The first step to calculating the FTE of your company is to make a list of all of your employees.
  • Full-time equivalent, or FTE, is a metric company based in the U.S. use to count how many hours all workers — including full-time, part-time, flexible, temporary, and as-needed employees — have worked.
  • The movie won seven awards at Britain’s equivalent of the Oscars, including best film, best director for Nolan and best leading actor for Cillian Murphy for his portrayal of the physicist J.
  • As you will understand by the end of this article, there are plenty of situations in which knowing the meaning of FTE and how to calculate it can be quite useful.
  • 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.
  • The second is the median gap in total remuneration, which includes salary and all the other employee payments.

So if a business has 10 employees who each work 80 hours per month, they would have 800 part-time hours. Dividing by 120 gives us 6.66, and the answer is rounded down to get six full-time equivalent employees. The Fair Labor Standards Act (FLSA) doesn’t define what full-time or part-time employment is for any employer. To fulfill an employer’s shared responsibility to provide access to employee health coverage under the Affordable Care Act, a full-time employee provides at least 30 hours of service per week (or 130 hours per month).

FTEs calculation methods for federal programs and benefits

Since we want to use the formula for yearly FTE, you would then multiply the weekly full-time hours by 52 to get the yearly full-time 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. The calculator will tell how many full-time employees that represents and whether or not you are an Applicable Large Employer. As you can see from the example above, you can easily calculate how many full-time equivalent employees you need to hire to successfully complete a project.

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