Full-Time Equivalent FTE Definition and FAQs BerniePortal

When 2,080 working hours are divided into 22,880 hours, the result is 11 FTEs. This material has been prepared for informational purposes only, and is not intended to provide, nor should you rely on it for, legal, tax, or accounting advice in any jurisdiction. You should consult your own legal, tax, and accounting advisors as part of your expansion plans. If you’re expanding your company or seeking out-of-country talent, there are certain requirements you must follow for a successful partnership. There are differences between FTE, headcount, and hours worked. FTE has a lot of different uses and calculation methods depending on why you want to calculate it. It will help you plan a project or your work according to deadlines and your budget.

Outside of the business environment, FTE is also used to measure a student’s class load or involvement in a school project… It seems like we never leave school behind. Clockify is a time tracker and timesheet app that lets you track work hours across projects. Business owners who want to understand whether their business is eligible to apply for a Paycheck Protection Program. FTE is also used to calculate the number of accrual hours for PTO, per employee. Read our employer’s guide to find out more about how to hire employees in Europe, Asia, Africa, or elsewhere. In this article, we will explore the meaning of FTE from a U.S. perspective, how it is calculated and the purposes of doing so as an employer.

Full Time Employee vs Full Time Equivalent

Let’s take a look at a few of the more common programs you might be expected to provide an FTE figure for. You can seamlessly collaborate with remote and in-person colleagues in a professional and stylish office space. This is where you’ll find the latest news and resources from BambooHR. Become a top-talent magnet with PCMag’s Editors’ Choice for best all-around HR software fte meaning in 2021—recruiting, onboarding, and performance tools, it’s all here. Put the entire BambooHR experience in the hand of every employee. When a company expands into a new country, there are key areas where potential disruption and mistakes can occur. Use our AI-driven, automated, fully compliant global employment platform powered by our in-house worldwide HR experts.

• Some employees (U.S. citizens or noncitizens) working outside the U.S.
• To track employee work hours and decide whether your employees are full-time equivalents, there are a lot of great tools for tracking teams.
• To calculate FTE, find your employees’ total amount of working hours, divide it by 40 hours, and round up to two decimals.
• Employers can use FTE to guide their hiring strategy and plan for a project, while governments often use the metric to determine program eligibility.
• In the past, if agencies were given a ceiling on the actual number of employed workers, which was reported on a given day of the year, the agency could employ more than this number for much of the year.
• Appeared in G2 Crowd Learning Hub, The Good Men Project, and Pick the Brain, among other places.
• Although most businesses consider 40 hours a week and 160 hours per month full-time employment, according to the IRS, 30 hours a week and 130 hours per month are enough.

For example, at The University of Utah, eligible employees who work the equivalence of 0.50 to 0.74 FTE of a full-time schedule will accrue at 50% of the full-time benefited rate . To convert the number of hours your employee is expected to work based on his or her FTE, you’ll need to reverse the previously mentioned process of calculating FTE based on the number of hours worked. An FTE salary is an employee salary converted into a full-time equivalent salary within a full year, regardless of whether the said employee holds a full-time or part-time position. The actual workload is not taken into consideration for this calculation.

Calculating FTEs for Standard Accounting

30-Hour a Week Example – If full-time in your company is 30 hours, then every employee who works 30 hours a week or more is considered full time. Two workers working 15 hours weekly would be considered part time and their combined FTE would be one. This definition is the most commonly used to determine how many FTE you have for ACA purposes. Both Carole and Lynn in our example above would be full-time employees under this example.

• For all intents and purposes, your business requires 4.25 employees to function.
• Once you have a total number of hours, divide by 2,080 and round down for your FTE.
• FTE stands for “full-time equivalent.” It refers to the number of hours worked by a single employee in a week.
• When 2,080 working hours are divided into 22,880 hours, the result is 11 FTEs.
• If an organization considers full-time to be a 40-hour working week then one full-time employee will count as 100% FTE.
• This tells you how many FTE employees your part-time workers add up to.

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. Although most businesses consider 40 hours a week and 160 hours per month full-time employment, according to the IRS, 30 hours a week and 130 hours per month are enough. In some cases, employers consider 37.5 hours a full-time work week because they don’t include the 30-minute mandatory daily break. Human resources often use the FTE metric to make staffing decisions for the entire company. Let’s say you need to calculate the total amount of hours, time, and money required for your business to run successfully.

Now let’s talk about other acronyms with numbers… FTE 100%. What is that?

To calculate for the month, divide by 173.33, which is equivalent to 2080 hours divided by 12 months. Full-time equivalent is a unit of measure that helps employers calculate the number of hours worked by all employees in their company. FTE also allows companies to standardise salaries by showing what the equivalent salary would be of a part-time employee were they working full-time. A related https://www.bookstime.com/ term is pro-rata – part time employees are paid an annual salary pro rata, which means adjusted for their working hours. The Paycheck Protection Program is a Small Business Administration program to help employers retain employees during the public health and economic crisis. The number of full-time equivalent employees is used to determine the amount of loan forgiveness for borrowers.

FTE counts part-time employees as some fraction of a full-time employee, usually based on the number of hours they work (though depending on the business, there are other ways of measuring a given employee’s contribution). Calculating headcount is as simple as adding up your employees, while FTE refers to the number of full-time hours being worked at the company. This calculation provides a convenient way to quantify how many theoretically “whole” full-time employees are on the company payroll, even if the majority of your workforce is actually part time. Create a list of each employee and how many hours they worked in the year.

It’s important to keep in mind that it doesn’t indicate the actual number of employees, but rather the actual hours worked. Whereas, employees that works 20 hours per week are considered 0.5 FTEs. So, 75 is the number of hours needed per day to finish the said 600-hour project — it will be up to you to decide how many people you’ll want to employ to carry this out, and what type of employment you will offer to them.

For the most accurate FTE calculation, hire a tax lawyer or accountant to calculate them for you. BerniePortal® is an all-in-one HRIS that allows small and mid-sized businesses to optimize HR, improve employee experiences and spend more time building the businesses they love. There are 8 working hours in the day on Monday, and the DEF Company staff works 136 hours during that day. When 8 working hours are divided into 136 hours, the result is 17 FTEs. There are 168 working hours in January, and the ABC Company staff works 7,056 hours during the month. When 168 hours are divided into 7,056 hours, the result is 42 FTEs.

A single full-time employee is the baseline of the measurement and has an FTE of 1.0, while a part-time employee working half as many hours has an FTE of 0.5. These values are combined with simple addition, so that three part-time employees working half as many hours as a full-time employee would have a total FTE of 1.5.