What Is Full-Time Equivalent FTE? G-P

define fte

It indicates what a company could spend on a part-time employee if they worked full time. It shows the number of work hours of an employee compared to a full-time employee. A full-time equivalent assists in tallying work hours, salaries, employee productivity, and company’s or workplace’s productivity, as well as calculating how much time an assignment or a project will take.

What does FTE mean in salary?

Wage in full-time equivalent is a wage that is converted to full time throughout the year. It does not consider the actual tasks and responsibilities related to the position.

The affordability threshold for employer-sponsored health plans in 2021 is 9.83%, which is a small increase from the rate of 9.78% in 2020. Cassie is a deputy editor, collaborating with teams around the world while living in the beautiful hills of Kentucky. She is passionate about economic development and is on the board of two non-profit organizations seeking to revitalize her fte meaning former railroad town. Prior to joining the team at Forbes Advisor, Cassie was a Content Operations Manager and Copywriting Manager at Fit Small Business. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Sign up to receive more well-researched human resources articles and topics in your inbox, personalized for you.

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DisclaimerAll content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. When using FTE alongside other performance metrics, it can become easier to understand per-employee costs and output in a large organization. For example, comparing the two groups over time allows an organization to find opportunities to improve efficiency when hiring seasonally or when making part-time and full-time staffing decisions. To convert an employee’s full-time equivalency into standard hours, multiply their FTE rate by 40. For example, if an employee has an FTE of 0.80, multiplying that number by 40 means that an employee works 32 hours a week.

Calculating your FTE highlights areas for improvement when it comes to project needs or employee hours. Full-Time https://www.bookstime.com/ Equivalent is a tool to use when calculating the costs of a project or forecasting employee hours and salaries.


By understanding your FTE, you can accurately assess how many staff members you must hire to deliver a project or staff a team. No, people who own the organization or company cannot be counted in the FTE and average annual wage calculation.

Considering that both count as a full-time schedule 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. Clockify lets you track your cost rates per employee and then compare and contrast them with employee billable hourly rates. With the variety of working options available today some employees may work part-time while others may only work at certain times of the year or in several other flexible ways.

What does FTE mean in salary?

Learn more about its pros and cons, and countries that adopted it…. In practice, these numbers still usually fall somewhere between 32 and 40 hours per week, with 40 hours per week being a common norm for a full-time schedule. 💡To track employee work hours and decide whether your employees are full-time equivalents, try Clockify, our free time tracker for teams. Full Time Equivalent refers to the unit of measurement equivalent to an individual – worker or student – one unit of a work or school day, applicable in a variety of contexts.

  • They are not measured in fractions or percentages — one employee is equal to one employee, no matter how many hours that employee has worked throughout the year.
  • This ensures that you’re not getting a skewed result based on a higher or lower number of hours worked in a week than typical.
  • If you’re expanding your company or seeking out-of-country talent, there are certain requirements you must follow for a successful partnership.
  • On the other hand, a full-time equivalent is one or more employees whose work hours combine together to total at least 30 hours per week or 130 hours per month.
  • And if an employee works a full 40-hour week, their FTE value would be 1.0 (40 hours worked / 40 hours).
  • To claim PPP, you may need to keep a PPP chart for the scheme’s duration to show your employee retention.

Companies with 50 or more FTE hours worked — regardless of the actual headcount — legally classify as an Applicable Large Employer . Once you’ve calculated your employee FTE, you can see how many part-time employees it takes to complete the same workload as a full-time employee. Full-time equivalent, or FTE, is a metric company based in the U.S. use to count how many hours all workers — including full-time, part-time, flexible, temporary, and as-needed employees — have worked. You might also find FTE referred to as whole-time equivalent or work-year equivalent , depending on the context. 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. Managers and executives use this figure to estimate the labor costs and timelines for a specific project or to fulfill a specific task.

Identify the part-time FTE

For example, if two part-time employees each work four hours per day for 10ten days apiece during a weekly pay period, their 40-hour combined total represents 1.0one FTE on the company’s payroll for that pay period. Headcount is the total number of employees working in your company, including part-time and full-time workers. They are not measured in fractions or percentages — one employee is equal to one employee, no matter how many hours that employee has worked throughout the year. Calculating headcount is good for creating organizational strategies and setting goals, but it doesn’t give you specific insight as FTE does for data like departmental labor. FTE goes even further than solely calculating project or staffing needs.

You’re able to establish all of your personnel requirements by calculating FTE. Full Time Equipment is based on the total number of hours worked, and not the number of people employed by an organization. The Paycheck Protection Program, established by the CARES Act, provides funds to small business owners to help them keep their workers on payroll. Within this method, the employee is credited with 40 hours for each week when payment was due .

Benefits of Calculating FTEs

FTE has many uses; as stated above, business analysts use it to calculate the labor cost and the number of employees required to complete a project. They also estimate whether part-timers or full-time equivalent employees are preferable for a project. Seeing a value of FTE 100% means a single full-time employee or multiple part-time employees work those full-time hours. This calculation provides a convenient way to quantify how many theoretically “whole” full-time employees are on the company payroll, even if the majority of your workforce is actually part time.

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100% FTE or 1.0 FTE refers to one full-time employee or a number of people who make up the duties of one full-time position. If you’re offering health coverage to remote workers, there may be some additional considerations.