What is Full-time Equivalent FTE & How to Calculate It

how to calculate fte

With this data at your fingertips, you can keep track of hours worked, along with how long it takes for employees to complete tasks. This means that 1 person is working full-time or several employees together work the number of hours determined for 1 full-time employee in the company. This is not the actual number of hours spent, just an expected number. The actual number of hours may differ for every part-time employee. For a full-time one, the exact number of hours equals the expected number of hours in most cases.

how to calculate fte

In our hypothetical scenario, our company has the equivalent of 52.40 full-time employees. With the required inputs in place, we can arrive at approximately 52.40 FTEs by dividing the total hours worked by all employees by the total number of available work hours in a year. Add the number of full-time employees to the full-time equivalent number of non-full-time employees. Divide the total by the number of hours used to define a full-time employee. FTEs are typically used in organizations to measure the size of staff and the amount of time each staff member works relative to a full-time employee. Divide the number of hours a staff member works by the standard number of hours a full-time employee would work, usually 40 hours.

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Within this method, the employee is credited with 40 hours for each week when payment was due . So, 75 is the number of hours needed per day to finish the said 600-hour project. However, it will be up to you to decide how many people you’ll want to employ to carry this out and what type of employment you will offer them. 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 estimation in project management guide Improve your time estimation in project management with our guide…. With Clockify, you can easily track your cost rates per employee and then compare and contrast them with employee billable hourly rates. When classifying FTEs and working hours in your company’s policy, you can follow suit, or define your own FTE measurements. A 100% FTE is the same as a 1.0 FTE — it may point to one person working a full-time schedule or several people fulfilling the duties of one full-time position. Outside the business environment, this unit of measure is also used to measure a student’s class load or involvement in a school project. We’ll also show you how to perform various calculations that involve FTEs, and provide you with automatic calculators that will help make the process easier.

How to calculate FTEs

Jennifer Soper is an HR Specialist and staff writer for Fit Small Business, with over 15 years of experience in accounting, payroll, and human resources. The 109,000 total hours worked must be divided by the total number of available work hours in a year, or 2,080 hours. The baseline in order to qualify as 1.0 unit fte meaning 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. This article was co-authored by Jill Newman, CPA and by wikiHow staff writer, Hunter Rising. Jill Newman is a Certified Public Accountant in Ohio with over 20 years of accounting experience.

How do you calculate FTE for 8 hour shifts?

Divide the total hours by the full-time hours.

To calculate FTE for the year, divide the total hours by 2,080 (8 hours a day x 5 days a week x 52 weeks a year). The result is the total full-time equivalent employees you have.

Keep track of the FTEs for each staff member on a continuous basis. In general, it is a valuable tool that can provide many benefits. Humans are at the heart of organisations, but if they are missing, how can operations continue? Variations in activity, absenteeism, labour shortages and staff turnover all too often lead to outsourcing and job insecurity. It is against these methods, and to solve urgent situations of understaffing, that the Andjaro replacement solution was created in 2016.

Example #1: 1 full-time employee / 40-hour workweek

She looks at KPIs likegross profit margin(should be over 50% before hiring) and cash accounts (should equal min. 3 months’ revenue). For additional clarity, she researches industry averages to determine what Toggl Track can offer its employees. Yearly FTE equals the hours one full-time employee works in a year. Though I’ll use yearly figures in my examples, you can gain useful insights by calculating monthly FTEs.

Employers can determine whether to offer these to their employees when it is reached to a certain number of FTE. To calculate the FTE, divide the figure by the number of hours per week required for a full-time position . There could be a link between the number of full-time employees in a firm or organization and the number of new ideas they generate. More people can contribute their unique thoughts and perspectives to assist solve problems and make key decisions when you have a larger team. Time tracking in Float gives you a combined view of your team’s estimated vs. actual hours worked so that you can plan future projects with greater accuracy.