fte meaning

In other words, FTE allows companies to standardize headcount and measure workload capacity by converting part-time staff to a full-time basis. Using the same formula, the number of part-time hours worked amounts to 5,000 hours per year. The chart below displays the number of weekly hours worked with the corresponding FTE under the standard 40 work-week. Do you want help with the management of your company’s key figures, helping your team make the right decisions, and implementing the right measures in personnel planning? If you want to save time, why not use our free full time equivalent calculator template for excel to easily work out your company’s FTE. FTE is a very specific term used to calculate whether a company is required to provide benefits under the Affordable Care Act (ACA) and the Family Medical Leave Act (FMLA), for example.

Full-timers often identify more closely with company mission and values. In our hypothetical scenario, our company has the equivalent of 52.40 full-time employees. Suppose a company currently has 50 full-time employees on its payroll, along with 10 part-time employees. FTE, an abbreviation for “full time equivalent”, counts the approximate number of full-time employees employed by a specific company, but with the inclusion of part-time employees. In practice, FTE is measured by companies to estimate the number of full-time employees employed within a specific time frame. This is how a company, on average, calculates the average yearly number of hours that a full-time employee works.

What is Full-Time Equivalent (FTE) & How to Easily Calculate It

Because the number of employees says nothing about a company’s actual work performance. To determine this amount, ask yourself, what do you expect https://www.bookstime.com/ a full-time employee to work in terms of hours per week? The answer should be between hours a week per employee (when considering full time).

fte meaning

By adding the full-time and part-time hours worked, we can calculate the total number of hours worked by all employees for the year as 109,000. Five of them work full-time (40 hours per week), three occupy a part-time position each working 20 hours a week, and the other two each work 10 hours per week. The list should include the employee’s name and the number of hours they work per week. Some businesses list this information in their employee handbooks or offer letters.

How to calculate FTEs to determine the headcount needed for a project?

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, as stated above. FTEs are the essential data needed to accurately forecast and manage labor costs across the organization. Each FTE represents the fully loaded expense of having one full-time permanent employee on staff.

fte meaning

In summary, understanding the meaning of FTEs is a key competency for HR professionals today. Knowing how to accurately calculate and strategically apply FTE analysis helps optimize staffing, forecast fte meaning budgets, align talent strategy to business goals, and support employee retention. Employee productivity can be measured to determine how much each full-time equivalent generates for the business.

How is FTE calculated?

Based on a 40-hour FT workweek, you’d need two full-time workers and one 0.5 FTE part-time employee. The Paycheck Protection Program (PPP) is a Small Business Administration (SBA) program to help employers retain employees during the public health and economic crisis. The number of full-time equivalent employees is used to determine the amount of loan forgiveness for borrowers. Full-time equivalents (FTEs) is a metric that measures the total number of full-time employees you have based on hours worked rather than the exact number of employees. Each part-time employee counts as a fraction of one FTE based on how many hours they work on average.

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

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