You can use your resource management tool to adequately divide your workforce (or bring more people on). Based on the FTE value, some of your employees could be eligible for minimum or affordable healthcare insurance. Knowing this will help you stay compliant with state and federal laws.
- For a business, specifically those with a large number of part-time workers, converting worked hours into FTEs is important in helping the company know how many full-time employees the part-time workers are equal to.
- 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).
- Now, the exact number of hours that a 100% FTE represents will depend on your company’s policies and the various labor laws in your state, country, and more.
- Join us on this webinar case-study to see how Vimeo was able to leverage the BambooHR and Boomr integration to simplify their workforce management and streamline their processes.
Additionally, you can use FTE to determine pay for part-time workers by simply multiplying a part-time employee’s FTE by the full-time salary for that same position. For example, if a full-time program coordinator makes $60,000 per year for 40 hours a week, a part-time employee working 25 hours per week in the same position (0.625 FTE) would make $37,500 per year. According to the Affordable Care Act (ACA), employers with 50 or more FTEs are required to offer ACA-compliant benefits. The ACA defines a full-time employee as someone who works 30 hours per week or 130 hours per month. If your company considers the number of hours for a full-time position as 40 hours per week, note that working 30 or more hours counts as 1 FTE for purposes of ACA compliance. 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).
Why Is FTE Important?
– 5 p.m.” If employees take a one-hour lunch, then the available hours per workweek is 40 hours (eight hours a day x five days a week). To determine this amount, ask yourself, what do you expect a full-time employee to work in terms of hours per week? The answer should be between hours a week per employee (when considering full time). Add your team’s billable rates to forecast project costs, and track actual hours worked to monitor budget spend.
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. Full-time equivalent, or FTE, is a calculation human resource managers use to determine how many full-time employees they have on staff. To get this figure, they add the hours paid to all employees (full-time, part-time, etc.) and divide that by the number of hours a full-time employee would work over a given period. For a business, specifically those with a large number of part-time workers, converting worked hours into FTEs is important in helping the company know how many full-time employees the part-time workers are equal to.
Full-time Equivalent (FTE) Calculator
For example, let’s say a full-time employee works 40 hours per week in your organization. A part-time employee who works 20 hours per week would have an FTE of 0.5. A part-time employee who works 10 hours per week would have an FTE of 0.25. FTE calculations are about hours worked rather than number of employees. Amir, Mark, Phyllis and Sue could each work 10 hours per week and the total would be 40 hours worked, or one FTE based on a 40-hour workweek. Full-time equivalent, or FTE, measures the total amount of full-time employees working at any one organisation.
As artificial intelligence technology continues to develop, the demand for workers with the ability to work alongside and manage AI systems will increase. This means that workers who are not able to adapt and learn these new skills will be left behind in the job market. Personio offers a host of valuable reporting and analytics fte meaning features, so that you can have access to critical HR KPIs at your fingertips. Find out more or start a free trial today to see how to run reports with Personio’s help. In this case, the calculation may show that the first professional is overqualified for the position, whilst the other needs more training and development.
FTE vs. Headcount: The Key Differences HR Should Know
Once you have a total number of hours, divide by 2,080 and round down for your FTE. A part-time worker who works half-time would be equivalent to 0.5 FTE. Whether an FTE of 0.75 is considered full-time will depend on the company policy made by the employer.
- A full-time equivalent (FTE) is a unit of measurement used to figure out the number of full-time hours worked by all employees in a business.
- Full-timers often identify more closely with company mission and values.
- In addition, Homebase provides small business employers with a range of scheduling options to ensure your staff hours are within the correct range.
- For example, some governments may simplify the process by assuming each part-time worker to be 0.5 FTE, regardless of the hours they work.
- You can use the FTE total each week, month, or year to determine company growth.
- The IRS Taxpayer Advocate Service has an Employer Shared Responsibility Provision (ESRP) Estimator to help you determine FTEs and see if you qualify as an ALE.
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). 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.
How to Calculate the Full Time Equivalent (FTE) in 4 Steps
These rates will depend on the PTO accrual rate policies of a company, organization, or institution. 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. In contrast, non-exempt positions who typically work only 28 hours per week on a 0.75 FTE schedule do not qualify, even if the employer policy defines them as full-time. Since both are considered to be full-time schedules in their respective companies, both count as 100% or 1.0 FTE.
- The Paycheck Protection Program (PPP) was launched by the US Small Business Administration (SBA) to help businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.
- Understand how accurately gauging FTEs can optimize staffing, predict budgets, and support employee retention – a must-read for every modern HR professional.
- See how Factorial powers productivity, engagement, and employee retention.
- Employers must notify all other current and former workers that any existing non-competes are no longer enforceable before the rule goes into effect.
- 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.