Moreover, the composition of the team and the essence of duties carried out notably influence the appropriateness of each method. To explain, contemplate a circumstance with 3 full-time staff, each spending 40 hours per week at work. The overall working hours of these 3 full-time staff members equals 3 multiplied by 40 working hours per week, yielding 120 hours. To do the Full-Time Equivalent (FTE) calculation, fte meaning entities must ascertain the standard weekly operational hours expected from their full-time workforce, exempting unpaid durations or breaks. Calculate FTEs by multiplying the total weeks in a year by the predetermined hours for a full-time role, providing a glimpse into the yearly workload. Incorporate their identities and weekly work durations, omitting intervals for compensated absence and illness.

Step 2: Determine what is considered full-time employment

This information becomes vital in forecasting budgets for the forthcoming year or specific assignments. In yearly predictions, FTE is occasionally denoted as the Work-Year Equivalent (WYE). You should also recognize the difference between FTE and an overall employee headcount.

Basic formula and calculation methods

To qualify for this program, the company can’t have more than 500 full-time employees or FTEs. So, if your company employs 900 half-time employees, it would still be eligible for the program because 900 employees working half-time would be equal to 450 FTEs. FTE or full-time equivalent is used to convert the hours worked by several part-time employees into the hours worked by full-time employees. In the realm of project management, Full-Time Equivalent (FTE) is a valuable tool for ensuring the efficient allocation of resources and tracking workforce contributions to project success.

• There are many other programs and laws that are applicable to companies with a certain count of FTEs – consult with an accountant who is familiar with the laws of the country your business operates in.
• 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.
• In order to determine the number of FTEs created by your part-time employees, you would add their number of hours worked and divide it by the number of hours in a full-time workweek.
• Now, Lisa is a full-time employee, so she is 1.0 full-time equivalents (FTEs).
• So, with all the previous steps in mind, let’s calculate the actual FTE based on the specific numbers we’ve used.

Method 1: Simple FTE Calculation

Whether an FTE of 0.75 is considered full-time will depend on the company policy made by the employer. If 0.75 FTE is considered full-time in a company, such employees may qualify to apply for the Public Service Loan Forgiveness (PSLF) program — eligible employees don’t have to pay out their federal student loans. This way, you will be able to determine the number of full-time equivalent workers in your company even when you have part-time workers on-site. You can calculate your FTE in four easy steps using formulas, which you can use as a basis for calculating annual FTE. Depending on the country your business is established in, calculating FTE is needed to determine which employment laws you need to follow or what benefits your company is eligible for. FTE full-time equivalent can be used for planning upcoming projects and the total number of people to be scheduled for these tasks, both full-time or part-time.

Examples of FTE calculations

By utilizing this computation, organizations can accurately measure their workforce capability, fostering strategic judgment and guaranteeing optimal utilization of human assets. In unraveling the FTE for part-time workers, divide their overall yearly hours contributed by the standard yearly hours of a full-time https://www.bookstime.com/ team member. The FTE paradigm simplifies project coordination by presenting a standardized approach to predict forthcoming project requirements and the obligatory hours for finishing assignments. If a project demands 300 labor hours, it can be converted into 7.5 FTE (300/40 hours) across five days.

• To calculate the full-time equivalent in your company for each employee, you’ll need to account for the hours of a full-time weekly schedule and the actual hours your employees are scheduled to work.
• This number may point to one person working a full-time schedule or several people fulfilling the duties of one full-time position.
• As would four part-time employees who each work 10-hours per week, totaling 40 hours.
• In education, FTE calculations may consider instructional hours, student-teacher ratios, and classroom capacity.
• There are companies that have a significant number of people working part-time, i.e., workers who spend only a short time in the company.
• The individual goals a company pursues mandate tailored considerations for effective resource planning and allocation.

• It enhances the effectiveness of the project coordination procedure, guaranteeing successful project completion.
• In other words, a full-time equivalent employee is a combination of the company’s part-time employees.
• FTE metrics provide a quantifiable measure of the workforce’s composition, offering insights into the balance between part-time and full-time employees.
• Ultimately, it is pivotal for a corporation to verify FTEs as it offers a clearer insight into the effectiveness and worth of its part-time workforce, measured by the number of tasks accomplished.

How to calculate FTEs for your company? (+ examples)