What is Full-Time Equivalent FTE & how to calculate it

full-time equivalent calculator
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 calculation is a monthly procedure that can change accordingly for each month. Part time employee’s total hours for the month can change the status of number of full time employees.

The calculation of full-time equivalent (FTE) is an employee's scheduled hours divided by the employer's hours for a full-time workweek. When an employer has a 40-hour workweek, employees who are scheduled to work 40 hours per week are 1.0 FTEs. Employees scheduled to work 20 hours per week are 0.5 FTEs.

For example, if an employer considers 40 hours per week as full-time, employees who work 40 hours each per week count as 1.0 FTE, while those that work 20 hours per week, or part-time, make 0.5 FTE. In this case, two part-time workers would count as 1.0 FTE, and four part-time workers would count as 2 FTE. Various combinations can be created depending on the needs of the business. And also for small business owners to see if they can apply for a tax credit in the amount of 50% of the employer-paid health care premiums. Next, add the total hours worked by full-time employees and the total part-time hours worked by part-time employees.

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Learn financial statement modeling, DCF, M&A, LBO, Comps and Excel shortcuts. Full-time equivalent, also known as whole-time equivalent, is a unit that indicates the workload of an employed person in a way that makes workloads comparable across various contexts. Monique Danao is a journalist and freelance writer who has worked with several startups and tech companies. Her work has been published in Sitepoint, Fast Capital 360, Social Media Today, WPMayor among other publications.

In one company, a full-time schedule may be 40 hours per week. Since both are considered to be full-time schedules in their respective companies, both count as a 100% or 1.0 FTE. However, the IRS mandates only 30 hours per week or 130 hours per month for an employee in the US to be considered full-time in terms of the type of employment. By adding the full-time and part-time hours worked, we can calculate the total number of hours worked by all employees for the year as 109,000. The full time equivalent metric is calculated by companies to estimate the number of full-time employees employed within a specific time frame.

FTEs in the workplace

In our hypothetical scenario, our company has the equivalent of 52.40 full-time employees. With the required inputs in place, we can arrive at approximately 52.40 FTEs by dividing the total hours worked by all employees by the total number of available work hours in a year. Three of them work full-time and the rest work 10 and 5 hours in total.

Five of them work full-time , 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 the hours worked by part-time employees into hours worked by full-time employees. To calculate the FTE for all employees in your company, consider the full-time and part-time employees you employ. However, bear in mind that this only applies to positions that work 30 hours per week when assigned a 0.75 FTE position, i.e., the IRS minimum for a full-time definition.

What is and how to calculate an FTE salary?

If a person works an 8 hour day which includes a 30 minute unpaid lunch break, then that persons work hours would be 7 hours and 30 minutes or in other words 7.5 hours. Multiple that by 5 days and that come to a 37.5 work week for a full-timer. Imagine you run a fidget spinner company with 15 salaried employees and 10 part-time employees. Your salaried staff members work 40×15, a total of 600 hours a week.

For buildings with more unusual occupancy patterns, you would still calculate the FTE building occupants based on a standard eight-hour occupancy period. Divide the calculated total by the number of hours that a full-time equivalent works. 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. 100% FTE or fte meaning 1.0 FTE refers to one full-time employee or a number of people who make up the duties of one full-time position. To qualify for PPP loan forgiveness an organization must have maintained the same level of FTE employees during certain specified time periods following the loan disbursement. If you’re offering health coverage to remote workers, there may be some additional considerations.

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