How to Calculate the Full Time Equivalent FTE in 4 Steps

full time equivalent calculator

First, it is necessary to determine the number of hours worked by part-time employees. The full-time equivalent converts the hours worked by part-time employees into hours worked by full-time employees. Suppose a company currently has 50 full time employees on their payroll, along with 10 part time employees. FTE counts the approximate number of full-time employees employed by a specific company, but with the inclusion of part-time employees. In the context of the Health Care Reform Act, The Affordable Health Care Act requires the calculations that determine whether a business is classified as owned by a large employer or a small business.

For example, say you run an ice cream van five hours per day, four days a week . It can refer to either one person’s work calculating full-time or numerous people doing the functions of one full-time employee. The first step in calculating FTE is to make a complete list of all employees. Also, do not include yourself as the business owner, unless you are paid a salary and receive a W-2. Depending on the number of FTE employees, a business may be required to provide time off for new parents and other family considerations, under the Family Medical Leave Act. Companies with a higher FTE may need to provide additional benefits to their employees. It is crucial for each company to know their FTE to ensure they are complying with the law.

For teams

Below, Equations 1 and 2 indicate the formulas to calculate the FTE. Each employee who worked more than 40 hours per week on average over a given calculation period is considered a full-time employee and is assigned 1.0 FTE.

The upcoming healthcare exchanges state that if your employee base is fifty or more there is important understanding of penalties that could be assessed to your company in the future. If your company has 50 or more full time or full time equivalent employees and minimum essential coverage to your employee’s healthcare is not met, then you may be penalized.

Answers you should have about Payroll and Payments

You’ll need to count the number of employees employed in your company throughout the year. For example, at The University of Utah, eligible employees who work the equivalence of 0.50 to 0.74 FTE of a full-time schedule will accrue at 50% of the full-time benefited rate . To convert the number of hours your employee is expected to work based on his or her FTE, you’ll need to reverse the previously mentioned process of calculating FTE based on the number of hours worked. FTE help in simplifying scheduling by converting workload hours into the number of people required to complete that work.

Don’t just calculate the number of employees needed for a project — carefully consider all relevant costs. Yearly FTE equals the hours one full-time employee works in a year. Though I’ll use yearly figures in my examples, you can gain useful insights by calculating monthly FTEs. The first FTE question you need to ask is “How many work hours are there in a year? ” – knowing full well that your part-time employees don’t work as many hours as your full-time employees.

What is an FTE salary? How to calculate an FTE salary?

Add the hours worked by full-time and part-time employees together, then divide that number by the total hours worked by full-time employees to determine the FTE fte meaning for that particular period. To calculate FTE for the year, divide the total hours by 2,080 . The result is the total full-time equivalent employees you have.

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