With FTE, you can get a clearer picture of how your employees are performing in their jobs. As was the case with the monthly FTE, this equation presumes that all work weeks had a total of 153 work hours. So, whether you’re a business owner, HR professional, or just curious about how work can be measured, understanding how to calculate FTE is a crucial part of effective workforce management. It’s used to determine the overall number of full-time hours that your team or business as a whole is able to perform or has performed during a certain period of time. Regardless of the type of business you’re in, it’s important to keep an updated number of your employees and the hours they dedicate to their work duties. By understanding the FTE concept and its applications, you can streamline your workforce, optimize budgets, and make well-informed decisions.
- It’s the key to unlocking the full potential of your team and your business.
- Full-time employees are those who work full time schedule, i.e. a minimum of 30 and a maximum of 40 hours per week and more than 120 days a year.
- However, if another employee works only 20 hours per week, they would be considered half-time.
- For example, comparing the two groups over time allows an organization to find opportunities to improve efficiency when hiring seasonally or when making part-time and full-time staffing decisions.
- Let’s say your company considers a full-time workweek to be 40 hours.
- A full-time employee (working 40 hours per week) is equal to one FTE; a part-time employee (working 20 hours per week) is equal to 0.5 FTE.
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Let’s say you have an upcoming project and you need to determine all your costs. You’re able to establish all of your personnel requirements by calculating FTE. So, with all the previous steps in mind, let’s calculate the actual FTE based on the specific numbers we’ve used. FTE or full-time equivalent is a tool to help you gauge the potential productivity of your business or company.
- She can often be found testing and writing about apps meant to enhance the workflow of freelancers, remote workers, and regular employees.
- Knowing your accurate FTE will help determine responsibilities for employees.
- To delve further into the matter, let’s look at how FTEs are calculated.
- Incorporating FTE considerations into project planning and execution can lead to improved project outcomes and cost control.
- According to the IRS and the ACA, part-time employees work fewer than 30 hours a week on average.
- The list should include the employee’s name and the number of hours they work per week.
Using a Full-Time Equivalent Calculator
If that’s not the case in your country or state, just adjust the numbers to reflect the labor laws you adhere to and your business practices. For example, if your full-time employee is obligated to work only 30 hours a week, you should use that number in your calculations instead of 40, as in our case. The full time equivalent, or ‘FTE’, is a unit of measurement that reflects fte meaning an employee’s productive capacity. It is used to determine the number of full-time hours that all employees within a business have worked. The full-time equivalent converts the hours worked by part-time employees into hours worked by full-time employees. Now, you could choose to assign one full-time employee and one part-time employee to work on the project for 1 week.
Bonus FTE calculators
If your company considers 35 hours full-time, then you would adjust your calculation accordingly. The calculator will then tell whether you are an Applicable Large Employer or not. Let’s https://www.bookstime.com/ say that a full-time weekly schedule in your company is 40 hours per week, and your employees are scheduled with 40 hours of work a week (which makes them full-time employees).
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A part-time worker who works half-time would be equivalent to 0.5 FTE. Clockify is a time tracker and timesheet app that lets you track work hours across projects. Bear in mind that these are just simple FTE example calculations — project managers approach FTE from a different angle, while federal programs use different FTE calculation methods. On the flip side, a spike in FTE levels without corresponding business growth may indicate a need to realign staffing plans and reduce hours. When tallying up hours worked, things like paid time off (PTO) and sick leave are included. However, external contractors and freelancers are generally not included in the FTE count.
Step 2. Define the number of hours for a full-time position
All you need to do is enter how many hours of work are required to complete the whole project (estimated time) and then how many hours a day your employees will work on that specific project. 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. First and foremost, make a list of all your employees within an organization.
Three full-time employees would have an FTE of 3.0 and the part-time FTE is 0.875. Jennifer Soper has 25+ years of writing and content design experience, working with small businesses and Fortune 100 companies. 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. Employers can also monitor workloads for future budgeting and staffing with FTE. There are numerous reasons why calculating FTE can prove meaningful to your company.
- It is sometimes useful to know how the total number of full-time and part-time employees are working in a business.
- Now, Lisa is a full-time employee, so she is 1.0 full-time equivalents (FTEs).
- Add the full-time FTE (in this case, it’s 2.0 since there are two full-time employees) to the part-time FTE from the previous step (1.5).
- For example, if your full-time employee is obligated to work only 30 hours a week, you should use that number in your calculations instead of 40, as in our case.
- Employers can also monitor workloads for future budgeting and staffing with FTE.