full time equivalent definition

In general terms, full-time equivalent (or FTE) is a unit of measure that plays an important role in calculations used in businesses, project management, or federal programs for eligibility purposes. 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. 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.

full time equivalent definition

Shift Swapping: How to reschedule, trade, and swap employee shifts the right way

For purposes of the employer shared responsibility provisions, a full-time employee is, for a calendar month, an employee employed on average at least 30 hours of service per week, or 130 hours of service per month. The ACA’s employer mandate applies to any employer who has at least 50 full-time equivalent employees. This can be a combination of full-time and full-time equivalent employees, with each full-time employee counting as one, and full-time equivalent employees added as described above. The full-time equivalent is used to determine employer size under the ACA. Any employee working at least 30 hours per week is considered full time. In addition, part-time employees are counted using the full-time equivalent method of adding the total number of hours worked by all part time employees in a month, and dividing by 120.

Why the FTE calculation is important

Using a Kiosk — for more advanced time management, choose the time clock Kiosk in Clockify where employees can clock in with their PIN code (just make sure you enable it in the Settings section). To easily calculate your employees’ FTE, try out Clockify — a time tracking tool that can also be of great help for identifying your employees’ FTEs. Bear in mind that the FTE is based on the total number of hours worked — it may not indicate fte meaning the actual number of people working in a company. 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?

How FTEs Work

In this way, scheduling projects based on the FTE calculation allows for greater accuracy in workforce planning and the efficient allocation of resources. To be able to calculate the total FTE in your company, you need to determine the FTE of your part-time workers first. To do that, you need to divide the total number of hours worked by your part-time employees by the total number of annual hours worked by 1 full-time employee. Whether an employer is an ALE under the shared responsibility provisions will depend on the size of the organization.

Integration of FTE data with workforce analytics enhances strategic decision-making, providing insights into workforce dynamics, trends, and performance metrics for effective planning and execution. Below is a step-by-step guide to two common FTE calculation methods, along with an example calculation to illustrate the process. Calculating Full-Time Equivalent (FTE) is crucial for organizations to assess their workforce capacity accurately. Running an organization can be like conducting a well-coordinated symphony, especially when it comes to maintaining a 12-hour working schedule,…

full time equivalent definition

A full-time equivalent employee is a worker with an FTE of 1.0, which will usually mean they’re employed full-time at your company. A full-time employee is considered to work at least 30 hours per week on average. 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 (which makes them full-time employees). This is a straightforward example since each employee who works 40 hours per week in your company has a 1.0 FTE. The full-time employees work 40 hours per week and 52 weeks out of the year, meaning that the number of full-time hours worked on an annualized basis is 104,000 hours. Whether you hire employees as part time or full time depends on your business needs and local regulations.

full time equivalent definition

What is 100 percent FTE?

Suppose a company currently has 50 full-time employees on its payroll, along with 10 part-time employees. Just indicate how many employees work at your company, how many hours they work a week, and for how many weeks. Our model will then instantly calculate the Full Time Equivalent for you. With 14 employees, 7 of which are full-time and 7 part-time, the staffing capacity is 9.04 full-time employees per year.

WUR 2024: table information – Times Higher Education

WUR 2024: table information.

Posted: Wed, 27 Sep 2023 07:00:00 GMT [source]

How to Calculate the Full Time Equivalent (FTE) in 4 Steps

Yearly FTE divides total hours by standard yearly hours (e.g., 2,080 hours). Part-time and seasonal workers contribute to FTE by calculating their hours worked as a proportion of full-time hours. For example, if a part-time employee works 20 hours per week and standard full-time hours are 40, their FTE would be 0.5. Similarly, https://www.bookstime.com/ seasonal workers’ hours are prorated based on their duration 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. An understanding of FTE also helps employers decide when to hire staff for short-term projects.

Planning New Projects Is Easier

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