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Next, add the total hours worked by full-time employees and the total part-time hours worked by part-time employees. A full-time position would equate to around 30 to 40 hours per week for most employers.

Alternative measures of FTE that incorporate these additional assumptions can place the number of hours for one FTE as low as 1,680 hours per year. The exact number will depend on the country where the employment is occurring, since the number of holidays varies by country.

## What Does FTE Stand for?

A full-fte meaning is equal to one FTE; a part-time employee is equal to 0.5 FTE. The total hours worked is the sum of the number of hours worked by part-time and full-time employees, whereas the number of available full-time hours in a year is most often 2,080. To calculate FTE for the year, divide the total hours by 2,080 . The result is the total full-time equivalent employees you have.

- A full-time employee who works the regular number of hours per week for their organization or industry is referred to as a 100% FTE (full-time equivalent).
- Proper calculations are crucial for the organization to ensure you’re meeting employer mandate regulations, submitting proper reporting, and avoiding costly penalties.
- Imagine that, with the same FTE, an employee can deliver 100 units, while another only delivers 30.
- An FTE 100% is a full-time employee, the one working 40-hour workweeks (also known as an FTE 1.0).

Add your team’s billable rates to forecast project costs, and track actual hours worked to monitor budget spend. Full-time equivalent employees are people who work the entire workweek—eight hours per day, five days a week, totaling 2,800 hours per year. You can also use an FTE calculation to determine the appropriate pay for part-time workers. To identify the FTE for a specific part-time position, just divide the number of hours worked by the employee by the number of hours considered for a full-time worker. 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. 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.

## Why are FTE calculations important for employers?

This is applicable if an employee has made 120 qualifying monthly payments while working as a full-time employee . Calculating the FTE may help you receive forgiveness regarding your student loan debt. In this particular case, your FTE must be 1.0 or 0.75 as the minimum requirement. Suppose a company currently has 50 full-time employees on its payroll, along with 10 part-time employees. FTE counts the approximate number of full-time employees employed by a specific company, but with the inclusion of part-time employees.

- Since both are considered to be full-time schedules in their respective companies, both count as a 100% or 1.0 FTE.
- The US falls somewhere in the middle when compared to other countries, with 38.8 hours of work time per week, on average.
- I bet you feel pretty stressed right now, your head must be hurting… But don’t worry, luckily we are here for you and in this article you will find the answers to all of your questions.
- The ACA makes health coverage a shared responsibility of individuals, employers, and the government to ensure that as many people as possible have affordable health insurance.
- FTE has several different uses and several different calculation methods, depending on why you want to calculate it.
- Labor CostCost of labor is the remuneration paid in the form of wages and salaries to the employees.

A company with 100% FTE has the same number of employees working full-time as there are hours in a week . This would be equivalent to a company with 50 full-time employees and no part-time workers. Under this act, eligible employers with at least 50 FTEs on average during the previous calendar year would be subjected to the IRS’s employer-shared responsibility. This is dependent on the company policies as few employers might recognize 40 hours/week and above as full-time. Generally, employers consider a full-time employee to work between hours a week. As per the IRS and the ACA, part-time employees work less than 30 hours a week on average.

## What a full-time equivalent is and how to calculate it

Use FTEs to check eligibility for tax and health insurance policies. Some health insurance policies through the Affordable Care Act are only available to businesses that have certain FTEs. For example, the Small Business Health Options Program requires you to have fewer than 50 FTEs to qualify. If you have more than 50 FTEs, then your business must offer 12 weeks of family and medical leave as well as more comprehensive health insurance plans. Make a list or pull the accounting records for all of the employees that work fewer than 30 hours a week. Add the hours worked by part-time employees to the hours worked by full-timers to get the total hours.

- Outside the business environment, this unit of measure is also used to measure a student’s class load or involvement in a school project.
- If a company considers 40 hours as full-time, an FTE employee would be someone who works 40 hours, or two employees working 20 hours would be considered 1.0 FTE.
- If you’re concerned about staying compliant, consider software such as Homebase that will track your employee hours, provide reporting, and can also prepare your time sheets for payroll.
- If you’re trying to determine whether or not you’re an ALE in the United States, you should use the IRS’s minimum of a 30-hour work week in your calculation.
- With this data at your fingertips, you can keep track of hours worked, along with how long it takes for employees to complete tasks.

Knowing how many full-time equivalent employees you have is beneficial for several reasons. For one, it makes planning resources and workloads across full and part-time staff easier. Maybe your team needs extra help from temporary workers or new hires. Or perhaps some of your part-time employees can put in additional hours to pull the weight of a larger project. For example, an employee working 20 hours per week is considered half a full-time employee (if the employer considers a 40-hour workweek full time). As long as the employee’s hours add up to 40 hours per week, it doesn’t matter what hours and days they work. Since FTE considers the total time worked, it provides flexibility.