In general terms, full-time equivalent (or FTE) is a unit of measure that plays an important role in calculations used in businesses, project management, or federal programs for eligibility purposes. Now add the total number of hours worked by full-time employees to that of part-time employees to get the total number of hours for all employees. Add fte meaning your team's billable rates to forecast project costs, and track actual hours worked to monitor budget spend. So, the total FTEs for this team is 4, indicating that the workload is equivalent to having 4 full-time employees. When it comes to managing people at work, it’s important to know and understand what “full-time equivalents” or FTEs are.

The importance of determining FTE

Seeing the accrual of leave in real time makes it easier to calculate the resources needed at any given time. Find the average number of hours worked to see if there's room for scaling or if you need to cut back to save on costs. For example, you'll want more hands on deck in a restaurant during the busy holiday and summer seasons. In the construction industry, you'll need a larger headcount when a bigger project comes along. It's easier to plan for this when you can visualize your project needs and team capacity.

What Is FTE & How to Calculate It

Plus, you'll need to understand what FTE is and how to perform the FTE calculation if you want to apply for the Paycheck Protection Program (PPP) loan forgiveness program. And don't forget to check out our dedicated Paycheck Protection Program Loan Calculator. Clockify is a time tracker and timesheet app that lets you track work hours across projects.

Step 4: Calculate total FTE

Those five workers are in fact equivalent to 3.37 full-time workers. Essentially, the FTE is the number of determined full-time positions in an organisation. It is used to count employees depending on their degree of employment.

• Calculating FTEs for part-time employees can be complex due to variations in their work schedules and hours.
• When you add your part-timers together, you create an FTE employee.
• Employers must calculate FTE accurately to determine things like overtime pay and staffing needs.
• A single full-time employee represents an FTE of 1, while part-time employees have a 0.5 FTE (or half that of a full-time worker).
• For example, if a company uses 40-hour workweeks, employees who work 40 hours a week are considered 1.0 FTE.

First and foremost, make a list of all your employees within an organization. Full Time Equivalent (FTE) refers to the unit of measurement equivalent to an individual – worker or student – one unit of a work or school day, applicable in a variety of contexts. In most cases, full time equivalents measure an employee or student and/or their workload. Three full-time employees would have an FTE of 3.0 and the part-time FTE is 0.875. Must be available for a Saturday rotation and for holiday coverage.

• It is used to count employees depending on their degree of employment.
• Based on a 40-hour FT workweek, you'd need two full-time workers and one 0.5 FTE part-time employee.
• With FTE, you can get a clearer picture of how your employees are performing in their jobs.
• To easily calculate your employees’ FTE, try out Clockify — a time tracking tool that can also be of great help for identifying your employees’ FTEs.
• FTE calculations can also help track salaries and labor costs within the organization.
• 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.

Use your FTE calculation to find out whether your company qualifies. If so, confirm you're offering the right level of health insurance to your team to prevent a tax penalty. Want to improve your project budgeting and allocate workloads more effectively?

Common Mistakes in FTE Calculation

Full-timers often identify more closely with company mission and values. Many HRIS softwares can automate FTE calculations by incorporating data on employee hours worked, absences, time-off calendars, and more. Full-time equivalent is a measure that shows how many full-time equivalent employees a certain company employs. This helps you compare https://www.bookstime.com/ and analyse the amount of work being done, even if your employees work odd hours. 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.

Step 2: Determine the number of hours needed to qualify as full-time

Altogether, those 18 employees only account for the hours of 4.5 full-time employees. It represents a single full-time employee or multiple part-time employees whose hours add up to one full-time employee’s hours. The annual hours for your part-time employees (C, D, and E) add up to 3,120 (1,560 + 1,040 + 520). The annual hours for your full-time employees (A and B) add up to 4,160 (2,080 x 2). The SBA defines FTE employees as workers who work 30 hours a week or more.

Manufacturing Costs: Significance, Types, and Cost Calculation

This will give you your total FTE for all full- and part-time employees for the year. You can use the FTE total each week, month, or year to determine company growth. You can also use the FTE total to remain compliant with federal, state, and local labor laws that may be based on employer size such as mandatory sick time laws. Various FTE formulas accommodate different timeframes and employee types. For weekly calculations, FTE equals total hours worked divided by standard weekly hours (e.g., 40 hours).