What Does FTE Stand For and How is Full Time Equivalent Calculated?

FTE can help you understand how much a project will cost in salary, as well as the number of hours required to complete it. This information can be helpful when budgeting for future projects. Headcount refers to the number of employees working in an organization, where each person counts as “one,” no matter how many total hours they work. You then divide the hours worked by one employee by the full-time hours in your organization to calculate the FTE. FTE gives organizations a standardized measurement by which to calculate staffing. By understanding your FTE, you can accurately assess how many staff members you must hire to deliver a project or staff a team.

Eligibility for the Paycheck Protection Program — Eligible employers may receive limited financial aid to cover payroll costs, benefits, utilities, rent, or mortgage interests. Such financial aid is subject to forgiveness if the borrower makes a request for it within 10 months of the end of the covered period. Considering that the FTE unit of measure is based on the total number of hours worked — it may not indicate the actual number of people working in a company. This is how a company, on average, calculates the average yearly number of hours that a full-time employee works. If you fail to meet the mandate for one full year but have met other requirements, you will owe an amount equal to the number of full-time employees you employed during that year, minus up to 30 employees.

Calculating FTE for the Small Business Tax Credit

For example, if a part-fte meaning works for 26 hours one week, their FTE value would be 0.65 (26 hours worked / 40 hours). And if an employee works a full 40-hour week, their FTE value would be 1.0 (40 hours worked / 40 hours). Your 55 part-time and full-time employees are equal to 48.68 FTE. Your 36 part-time and full-time employees are equal to 33.5 FTE.

Clockify is a time tracker and timesheet app that lets you track work hours across projects. To calculate the number of hours your employee is expected to work based on their FTE, you’ll need to reverse the previously mentioned process of calculating FTE based on the number of hours worked. For example, you may want to do this when you want to make an FTE offer to a new employee during a job interview.

Time Recording App

To help you determine if you are eligible for a small-employer healthcare tax credit, you need to count the number of employees employed in your company throughout the year. If you are such an employer, then you are eligible to apply for a tax credit in the amount of 50% of employer-paid health care premiums. To calculate the full-time equivalent for the actual full-time employees, simply do a headcount. However, the IRS mandates only 30 hours per week or 130 hours per month for an employee in the US to be considered full-time in terms of the type of employment.

In most cases, employers fall below the threshold required to be an ALE and are, therefore, not subject to the employer shared responsibility provisions. They also use it to calculate labor costs for the expected project workload and subsequently define the funds needed to finish a project. For instance, in terms of business, calculating FTEs may be of great use when determining how many hours part-time employees should work to equal the number of hours full-time employees work.