What Is Full-Time Equivalent FTE?


Since both are considered to be full-time schedules in their respective companies, both count as a 100% or 1.0 FTE. 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. To determine this amount, ask yourself, what do you expect a full-time employee to work in terms of hours per week? 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.

  • Full-Time Equivalent provides the basis for understanding the individual’s contribution towards organizational success.
  • In general, full-time means an employee who works 40 hours per week, although this can vary depending on the organization.
  • To plan the workload and determine the necessity to hire more employees.
  • Figuring out exactly how many people work for a company is more complicated than asking for a show of hands.
  • Meet with your management team, trusted employees, and other stakeholders and compare your figures to their on-the-ground experiences.
  • Software, for free, and you will test all the benefits of our tool.

If you’re offering health coverage to remote workers, there may be some additional considerations. Identifying which employees are FTEs is essential for a number of reasons ranging from workforce planning to adhere to employment laws under the Affordable Care Act. If you want to run a business, or you already have one, two important things and skills you need to master are acronyms and math.

How does FTE impact employment within the company?

An employee with a regular budgeted assignment of 75% of a full-time job position has a 0.75 FTE. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Level up your career with the world’s most recognized private equity investing program. You can also use an online calculator if you don’t want to manually calculate FTEs.

fte meaning that number by the number of weekly work hours that make an employee full-time. In this case, that number would be 30 since the IRS states that as soon as an employee works 30 or more hours per week, they’re considered full-time. More importantly, many government support programs use FTE as a basis to decide how your company should be treated. And some state and federal employment laws only apply to companies who meet a certain threshold of FTE employees. This could refer to either a single full-time employee or two or more part-time employees whose contributions add up to the equivalent of one full-time worker. The 2,080 figure can be called into question, since it does not include any deductions for holidays, vacation time, sick time, and so forth.

What is an FTE Number?

If you have employees who work 40 hours a week, they’re full time. At 52 weeks a year, one full-time employee puts in 2,080 work hours a year. One way to calculate FTE is to add up your staff’s annual hours and divide by 2,080.


Full-Time Equivalent is a tool to use when calculating the costs of a project or forecasting employee hours and salaries. In other cases, you’ll need multiple employees to fill the quota—two part-timers, four employees that only work 10 hours a week, etc. You can create various combinations, depending on your business needs.

Step 4. Add annual hours worked for full-time employees and part-time employees

Keeping track of employee hours ensures everyone gets a fair share of the workload. It also keeps part-time workers from going over their allotted hours each month. Add your team’s billable rates to forecast project costs, and track actual hours worked to monitor budget spend. Horizons can support your business by helping you hire full-time employees anywhere in the world. Whether you are looking to expand your business internationally, outsource your operations, or take on more remote staff contact us today to discuss your needs. This is particularly true for large organizations that employ a variety of full-time, part-time, and flexible staff.

shared responsibility

Since FTE considers the total time worked, it provides flexibility. This is critical in today’s workplace, with more people working remotely and with flexible hours. FTE stands for full-time equivalent, and it’s a unit of measurement equal to the number of hours typically worked by a single full-time employee at a given company. FTE is a way for employers to add up and compare a mix of part-time and full-time workers, by combining their relative working hours into one simple and easy to understand value.

What is a 0.5 FTE?

In this article, we’ll teach you everything that you need to know about calculating this metric and why it matters. Now add the total number of hours worked by full-time employees to that of part-time employees to get the total number of hours for all employees. Moreover, having accurate FTEs for all employees will also help employers determine responsibilities towards them, their PTO rates, and whether the business is eligible for certain federal programs. Let’s say that a full-time weekly schedule in your company is 40 hours per week, and your employees are scheduled with 40 hours of work a week. This is a straightforward example since each employee who works 40 hours per week in your company has a 1.0 FTE.

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