FTEs can be compared to revenue output and other productivity metrics to assess workload balance across the organization. Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI’s full course catalog and accredited Certification Programs. For example, 1.0 is typically the FTE representation of an individual’s full work/school day, while 0.5 would indicate half of the original figure, generally in reference to the workday. In reference to an individual, 0.5 usually refers to the fact that the worker renders less than a full day of work or the student attends less than a full day of classes.
- You can also use an FTE calculation to determine the appropriate pay for part-time workers.
- The first step in calculating FTE is to make a complete list of all employees.
- If a company considers 40 hours per week as the basis for a full-time position, then anyone working an amount of hours below this range is considered a part-time employee.
- You’ll also need to know the actual number of weekly work hours to complete the FTE calculation.
- Through this, you can identify the needs and internal capabilities of your employees more easily, as well as exercise more strategic management.
- It is sometimes useful to know how the total number of full-time and part-time employees are working in a business.
- That said, full-time equivalent (FTE) is a metric used to determine the total number of full-time workers that you have in an entire organization.
If your company considers 35 hours full-time, then you would adjust your calculation accordingly. They also use it to calculate labor costs for the expected project workload and subsequently define the funds needed to finish a project. The full-time employees work 40 hours per week and 52 weeks out of the year, meaning that the number of full-time hours worked on an annualized basis is 104,000 hours. A full-time equivalent (FTE) is fte meaning a unit of measurement used to determine the amount of full-time hours worked by all employees in an organization. If a normal work week consists of 40 hours, an employee who works for 40 hours per week has an FTE of 1.0 while a part-time employee working only 20 hours per week has an FTE of 0.5. Full-time equivalent, or FTE, is a calculation human resource managers use to determine how many full-time employees they have on staff.
Compare your estimated vs. actual hours worked
Through this, you can identify the needs and internal capabilities of your employees more easily, as well as exercise more strategic management. The underlying period can be, for example, a day, a month or even a year. Being a basic criterion in staff controlling, it is one of the most important staff indicators for companies. Particularly due to the development in the part-time sector, your staff planning will be more comprehensible and controllable with this ratio. With Clockify, you can easily track your cost rates per employee and then compare and contrast them with employee billable hourly rates. An employee with a regular budgeted assignment of 75% of a full-time job position has a 0.75 FTE.
- The baseline in order to qualify as 1.0 unit of a full-time employee is set at 40 hours, so a part-time employee that worked 20 hours would be marked as a 0.5 FTE.
- When calculating your FTEs for basic accounting or business purposes, the simplest way to do it is to divide total annual work hours for all employees by an average full-time annual work schedule.
- The same logic is applied if a company considers 30 hours per week as the standard for a full-time position.
- In practice, FTE is measured by companies to estimate the number of full-time employees employed within a specific time frame.
- (For a year, that is 2,080 hours with 40-hour workweeks and 1,560 hours with 30-hour workweeks, which is considered full-time for ACA reporting).
To see your employees’ FTEs, you can view their daily/weekly/monthly assignments in Clockify. Within this method, the employee is credited with 40 hours for each week when payment was due (including PTO). Within this method, the employee is credited with 8 hours for each day they would be required to work at least 1 hour (including PTO). When classifying FTEs and working hours in your company’s policy, you can follow suit, or define your own FTE measurements.
Summary: How to Calculate FTE
So, with all the previous steps in mind, let’s calculate the actual FTE based on the specific numbers we’ve used. Join BambooHR and League to explore how to go beyond wellness resolutions so your organization can reap all the benefits of a healthy workforce. When using FTE alongside other performance metrics, it can be easier to understand per-employee costs and output in a large organization. It applies the following procedure, which we explain through an example for a hypothetical company. 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). Outside the business environment, this unit of measure is also used to measure a student’s class load or involvement in a school project.
In this article, we will not only explain to you the https://www.bookstime.com/, but we will also provide examples, helping you fully understand how to calculate FTE for your company. Plus, you’ll need to understand what FTE is and how to perform the FTE calculation if you want to apply for the Paycheck Protection Program (PPP) loan forgiveness program. And don’t forget to check out our dedicated Paycheck Protection Program Loan Calculator. Clockify is a time tracker and timesheet app that lets you track work hours across projects. FTE has several different uses and several different calculation methods, depending on why you want to calculate it. It will help you plan your project work, set deadlines, and work out your budget.