How to calculate your workforce full-time equivalent?

In project management, a full-time equivalent (FTE) is a unit of measurement that allows you to match personnel with projects. In practice, FTE is measured by companies to estimate the number of full-time employees employed within a specific time frame. To be required to provide COBRA continuation coverage, a company must employ at least 20 full-time equivalent employees on more than half of its working days in the past year. In a 0.75 FTE position, an employee will typically work 75 percent of the hours of a full-time employee.

Depending on the type of work that is required, management can decide the number of full-time employees that are needed for a particular project and assign employees to those positions accordingly. All the above-mentioned factors end up costing the company something and affecting its bottom line. Now determine the number of hours worked by full-time employees over a given period. Full-time employees are those who work a minimum of 30 and a maximum of 40 hours a week and more than 120 days a year.

What Is Full-Time Equivalent (FTE) & How Is It Calculated?

An FTE calculation for all employees in a company needs to be rounded down to the nearest whole number (usually, 1.0 FTE or greater). If you want to run a business, or you already have one, two important things and skills you need to master are acronyms and math. Because, if you don’t know about this stuff, how else are you going to know how to calculate 0.5 FTE? I bet you feel pretty stressed right now, your head must be hurting… But don’t worry, luckily we are here for you and in this article you will find the answers to all of your questions.

• The FTE is used to determine how much paid time off employees can take, and different organizations have different policies regarding PTO.
• With three part-time positions, this results in a value of 1.5.
• In this case, two part-time workers would count as 1.0 FTE, and four part-time workers would count as 2 FTE.
• First, let’s look at what full-time equivalent or FTE actually means.
• Because, if you don’t know about this stuff, how else are you going to know how to calculate 0.5 FTE?

Under the ACA, certain small businesses are eligible for a small-business tax creditto help with the costs of offering health benefits to employees. One qualification for this credit is that the business must have 25 or fewer FTEs. Knowing lease vs. rent your number of FTEs is important for assessing business performance, and it’s required under the Affordable Healthcare Act (ACA) and for certain tax credits. The method for calculating FTE is slightly different for each of these uses.

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So the FTE is not the number of employees in a company, but the equivalent of a full-time employee. Because the number of employees says nothing about a company’s actual work performance. 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. Let’s 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. This is a straightforward example since each employee who works 40 hours per week in your company has a 1.0 FTE. Since both are considered to be full-time schedules in their respective companies, both count as a 100% or 1.0 FTE.

Manually calculating and then recalculating your FTE can lead to errors and discrepancies in data, this is why it is a good idea to use workforce planning tools and automate this process from the very beginning. The value of knowing your FTE depends on whether you’re looking for something specific in your business or organization. You can seamlessly collaborate with remote and in-person colleagues in a professional and stylish office space. Read our employer’s guide to find out more about different types of insurance you can offer your employees. An employee with a regular budgeted assignment of 75% of a full-time job position has a 0.75 FTE.

What a full-time equivalent is and how to calculate it

This tells you how many FTE employees your part-time workers add up to. Add this to the number of actual full-time employees you have to find your total FTE. It is critical for accounting purposes and determining wages, and for calculating the company’s expenses when paying its workers. A full-time equivalent (FTE) is a unit of measurement used to determine the amount of full-time hours worked by all employees in an organization.

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. FTE or Full-Time Equivalent is an HR metric that quantifies an employer’s number of full-time employees regardless of how many hours each employee works. It was created to measure part-time employment in terms of full-time hours. In other words, an employer who has both full-time and part-time workers can quantify all hours worked in terms of full-time employment.

What is FTE?

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. 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. Sometimes one person can be your FTE 100%, or FTE 1.0, which is another way to call it.

The total hours worked is the sum of the number of hours worked by part-time and full-time employees, whereas the number of available full-time hours in a year is most frequently 2,080. The FTE employee doesn’t have to actually exist, and can be a combination of part-time employees. For example, if your entire staff works part-time, the FTE employee is a hypothetical full-time worker by which your part-time workers are measured. If an organization considers full-time to be a 40-hour working week then one full-time employee will count as 100% FTE. 100% FTE can also be achieved in several other ways, for example, through two part-time employees (who each work 20 hours per week) or four employees who work 10 hours per week. Rather than hiring new employees, businesses can use FTE to deploy staff across various departments thereby keeping costs down.

What are employer shared responsibility provisions?

It is used to count employees depending on their degree of employment. The Affordable Care Act (ACA) contains provisions that only apply to Applicable Large Employers or ALEs. Perhaps you’ll find that part-time staff or independent contractors are more productive or effective than the equivalent in full-time staff, or perhaps part-time staff are struggling to get the job done with their hours. Either way, you can take that data on FTE, alongside additional information on output, and make the relevant changes to your workforce structure. Let’s say you feel strongly that there is a discrepancy between what part-time staff are getting done compared to full-time employees. This is just a gut feeling, but FTE allows you to put science behind that feeling.

To determine your eligibility for the small-business tax credit, you’ll need to use a different system for counting FTEs. First, count the total number of employees who worked at your company at any time during the year, both full-time and part-time. Now, it’s important to note that this FTE result does not necessarily reflect actual FTE employees. After all, people take time off work, vacations, sick leaves, etc — all of which reduces their hours worked and has an impact on your workforce planning process. A full-time equivalent (FTE) is also a way of quantifying the workload of a project or team in terms of the amount of time it would take to complete. It’s the most common unit of measure used when calculating staffing levels for projects or teams.