How to Calculate Full-Time Equivalent FTE

A full-time equivalent employee refers to a combination of part-time employees that add up to one or more full-time employees. If an employer employs fewer than 50 full-time employees in the preceding year it will not be considered an ALE and, therefore, the employer will not be subject to the shared responsibility provisions for the current year. To calculate your FTE when applying for a PPP loan, take the average number of hours worked by employees each week for the covered period, divide by 40, and round to the nearest tenth. For a PPP loan, a full-time employee is considered to work at least 40 hours per week, and no single employee can have an FTE exceeding 1.0. Some labor laws and employee benefit programs are linked to how many employees a company has on its payroll. To ensure that a company with 100 part-time employees is treated as fairly as one with 50 full-time employees, an FTE is calculated to compare both workforces.

• The employees in excess of 50 employed during the 120-day time period are seasonal workers.
• Depending on how many part-time workers you employ, you’re likely to have a higher overall headcount than FTEs.
• FTE refers to the number of hours that are considered full-time.
• And, the actual number of hours attached to a FTE will also depend on your organization’s policy.
• The FTE employee doesn’t have to actually exist, and can be a combination of part-time employees.

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And the million dollar question… WHAT IS FTE? WHAT THE HELL IS THAT?

To calculate FTE for COBRA, multiply the number of part-time workers you have by the average number of hours they each work per week, and divide the result by 40 (the working hours in a week https://www.bookstime.com/ for a full-time employee). This tells you how many FTE employees your part-time workers add up to. Add this to the number of actual full-time employees you have to find your total FTE.

For example, a pizza shop employs 5 workers who work the following average working hours excluding employees who are on leave, paid time off and sick leave. 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. Based on an FTE of 1.0, we calculate employees work 2,080 hours per year. Furthermore, this value is used only as a basis for calculating the annual FTE and reflects the hours of an employee fte meaning who works 5 days a week, 8 hours a day. 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. In general terms, full-time equivalent is a unit of measure that plays a role in calculations used in project management and federal programs for eligibility purposes. Additionally, FTE calculations give you a better sense of your current staffing levels so that you can plan and budget accordingly.

Give some leeway for time off

Being able to track your employees’ workloads and output between your full-time employees and FTEs gives you more insight into how efficiently your employees are working. When added together, the hours of your three part-time employees equal 80 hours. If you currently employ both full and part-time employees, you need to determine how many FTE employees you have. An FTE employee is not necessarily a single employee; it may be a combination of several part-time employees who, when their hours are added together, create a full-time equivalent, or FTE, employee.

For example, let’s say you have a 100-hour project to complete within a week. Based on a 40-hour FT workweek, you’d need two full-time workers and one 0.5 FTE part-time employee.

The role of FTE in calculating eligibility for the Paycheck Protection Program (PPP)

In order to determine the number of FTEs created by your part-time employees, you would add their number of hours worked and divide it by the number of hours in a full-time workweek. Below, Equations 1 and 2 indicate the formulas to calculate the FTE. If an organization considers full-time to be a 40-hour working week then one full-time employee will count as 100% FTE.

Under this scheme, employees and their families can temporarily continue to avail of their group health insurance coverage even after the loss of a job or other permitted reason as per the law. It is meant to provide an aspect of economic security for employees who would otherwise be susceptible to losing their insurance. Let’s say that you need to calculate the total amount of hours, time, and money required for your business to run successfully.. Just indicate how many employees work at your company, how many hours they work a week, and for how many weeks.

Several part-time employees can add up to one full-time employee. Confused? Here’s how FTE works

Also, do not include yourself as the business owner, unless you are paid a salary and receive a W-2. You can apply different methods for different classifications of employees, as long as you apply the method consistently within each classification. Once you have a total number of hours, divide by 2,080 and round down for your FTE.