What Is Full-Time Equivalent FTE?

Depending on your project needs, you can use only full-time employees or a mix of full-time and part-time to equal that FTE of 31.3. There’s a ton of flexibility that gives you the option to adjust with the scope of your project. For example, you could use a 1.3 multiplier to cover taxes and benefits. You could then apply a 1.8 multiplier to this number to account for equipment, facility rent, equipment, etc.

If your salaried team members work 40 hours a week for 52 weeks, you would use 2080 hours to represent an annual FTE. Knowing the difference between a full-time employee, a part-time employee, and an equivalent employee is a good place to start. Proper calculations are crucial for the organization to ensure you’re meeting employer mandate regulations, submitting proper reporting, and avoiding costly penalties. Lastly, add the number of full-time employees you have to the full-time equivalent of your part-time employees to get your total FTEs for your organization.

Additional Resources

An FTE is a measure of how many employees are equivalent to a full-time worker. To calculate it, take the total hours worked by all part-time employees and divide it by the hours worked by https://www.bookstime.com/ full-time employees. 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.

In the chart below, because both Carole and Lynn are full-time employees, they would each be counted as one FTE. However, determining the FTE for Jimmy and Marta requires calculation. You typically would not include hours that owners or partners work within this calculation, but you can do so for your own accounting purposes if you want to include labor from ownership fte meaning as part of your evaluation. Managers and executives use this figure to estimate the labor costs and timelines for a specific project or to fulfill a specific task. Meanwhile, finance teams use this information when planning financial forecasts and determining revenue and profits per employee. There are different ways to then decide how to break down that final number.

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FTE is also used to calculate the number of accrual hours for PTO, per employee. If you want to avoid the lengthy and complicated calculation, you can use the Full-time Equivalent Employee Calculator from Healthcare.gov to see if you qualify for the Small Business Health Options Program marketplace. Cassie is a deputy editor, collaborating with teams around the world while living in the beautiful hills of Kentucky. She is passionate about economic development and is on the board of two non-profit organizations seeking to revitalize her former railroad town.

• FTE stands for full-time equivalent, and it’s a unit of measurement equal to the number of hours typically worked by a single full-time employee at a given company.
• Full-time employees usually work 40 hours each week for over 120 days a year, but it also includes anyone who works more than 30 hours weekly.
• Create a thorough allocation report by determining productivity figures for each employee (depending on their role/department).
• Being able to track your employees’ workloads and output between your full-time employees and FTEs gives you more insight into how efficiently your employees are working.