How to Calculate FTE: Full-Time Equivalent Formulas & More

To determine this amount, ask yourself, what do you expect a full-time employee to work in terms of hours per week? 60% of funds spent on monthly pays, hourly earnings, commissions, additions, and other incentives. With non-payroll costs consisting of 40% of the funds spent full time equivalent on rent, interest on loans, or conveniences of the employees. In the Netherlands, the average full-time work schedule of the employees is approximately 29 hours and 18 minutes per week. Whereas in Colombia, the average full-time work schedule per week is nearly 48 hours.

It can be useful to calculate paid time off for employees and if the business is eligible for federal programs. According to the IRS, a US employee has to work 30 hours every week or 130 hours a month to qualify as a full-time employee. In many organizations, the most typical work schedule is 40 full-time hours per week. Generally, employees work 8-hour shifts for five days every week.

How to Calculate Full-Time Equivalent

FTE will influence how many hours employees can accrue for PTO. The actual PTO an employee can accrue may depend on several factors, including years of employment that dictate an employee hourly PTO accrual rate. These rates will depend on PTO accrual rate policies of a company, organization, or institution. We already discussed how to use work hours to calculate FTE for individual employees.

• This tells you how many FTE employees your part-time workers add up to.
• If you have more than 50 FTEs, then your business must offer 12 weeks of family and medical leave as well as more comprehensive health insurance plans.
• For instance, Janice, Ben, John, and Josh could each work ten hours per week for a total of forty hours per week, or one full-time employee can work based on a 40-hour workweek schedule.
• Get this by multiplying the number of full-time employees by the number of hours in a working week .
• In other words, one part-time employee is equal to 0.5, or half, of a full-time employee for hours, worked.

Read our employer’s guide to find out more about different types of insurance you can offer your employees. For example, a project that is estimated to take 600 hours of work can be accomplished in a variety of ways depending on your allocation of staff and time requirements. Yearly, a company generally considers an FTE to be valued at 2,080 hours. To delve further into the matter, let’s look at how FTEs are calculated.

Several part-time employees can add up to one full-time employee. Confused? Here’s how FTE works

Employers can use FTE to evaluate their hiring capacity and current payroll, as well as for reporting purposes related to labor laws and employee benefit programs. Three full-time employees would have an FTE of 3.0 and the part-time FTE is 0.875. Sometimes one person can be your FTE 100%, or FTE 1.0, which is another way to call it. 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). This article was co-authored by Jill Newman, CPA and by wikiHow staff writer, Hunter Rising. Jill Newman is a Certified Public Accountant in Ohio with over 20 years of accounting experience.

• With the required inputs in place, we can arrive at approximately 52.40 FTEs by dividing the total hours worked by all employees by the total number of available work hours in a year.
• You can also use an online calculator if you don’t want to manually calculate FTEs.
• First, let’s look at what full-time equivalent or FTE actually means.
• This can be a combination of full-time and full-time equivalent employees, with each full-time employee counting as one, and full-time equivalent employees added as described above.
• – 5 p.m.” If employees take a one-hour lunch, then the available hours per workweek is 40 hours .

The full time equivalent metric is calculated by companies to estimate the number of full-time employees employed within a specific time frame. This includes three full-time employees that work 40 hours per week.

AccountingTools

She can often be found testing and writing about apps meant to enhance the workflow of freelancers, remote workers, and regular employees. Appeared in G2 Crowd Learning Hub, The Good Men Project, and Pick the Brain, among other places.

• ​​FTE is the full-time equivalent hours that all the employees in your business represent.
• Certain employees are not included in the calculation such as owners, partners, shareholders, family members or relatives, and seasonal workers who work fewer than 120 hours per year.
• In practice, these numbers still usually fall somewhere between 32 and 40 hours per week, with 40 hours per week being a common norm for a full-time schedule.
• Your 36 part-time and full-time employees are equal to 33.5 FTE.
• However, you’d want to average those hours over a time period such as four months.
• Standard FTE assumes that typical employees work 40-hour workweeks, five days a week, and eight hours a day.