Full-Time vs Part-Time vs. FTE: What You Need to Know

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If your business has a 32- or 35-hour workweek, then multiply the number of employees by that amount instead of 40. While headcount planning can help HR work with managers and business leaders to build and scale the organization’s workforce, it does have some limitations. Headcount is a metric that calculates the number of employees in an organization at any given time. This helps HR focus their recruitment efforts and inform workforce planning efforts to ensure they have the right people in the right place to meet organizational goals. To find the equivalent of a full-time day, divide the total number of hours by 8.

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It could also be a temporary staff member who works an irregular schedule. FTE stands for full-time equivalent and is used by businesses to calculate the total number of full-time hours worked within their business among all employees. A full-time employee is equal to one FTE; a part-time employee is equal to 0.5 FTE. FTE (full-time equivalent) is the unit of measurement that measures the ratio that represents the hours worked by an individual employee within a week, generally from Monday to Friday. After completing the project, you can remove them without any negative effects of the termination of an employee.

How to Calculate the Full Time Equivalent

Plus, it makes it easy to compare the productive capacity of organizations and departments, which is not possible with headcount. My Accounting Course is a world-class educational resource developed by experts to simplify accounting, finance, & investment analysis topics, so students and professionals can learn and propel their careers. Time estimation in project management guide Improve your time estimation in project management with our guide….

From there, if your full-time hours are 40 per week, divide the number by 2,080. If your total full-time hours are 30 per week, divide the number by 1,560. This will give you your total FTE for all full- and part-time employees for the year. You can use the FTE total each week, month, or year to determine company growth. You can also use the FTE total to remain compliant with federal, state, and local labor laws that may be based on employer size such as mandatory sick time laws. 30-Hour a Week Example – If full-time in your company is 30 hours, then every employee who works 30 hours a week or more is considered full time.

Identify the part-time FTE

In the past, if agencies were given a ceiling on the actual number of employed workers, which was reported on a given day of the year, the agency could employ more than this number for much of the year. Then, as the reporting deadline approached, employees could be let go to reduce the total number to the authorized ceiling on the reporting date. To calculate FTEs and see if you qualify for tax credit, you can choose one of the said methods (we’ve provided calculators for each). If you, for instance, choose the first method, enter all the actual hours worked and divide that number with 2,080 to get the final FTE. The calculation is straightforward — enter the number of full-time employees together with the total number of hours worked by part-time employees per week.

  • All the above-mentioned factors end up costing the company something and affecting its bottom line.
  • Horizons can support your business by helping you hire full-time employees anywhere in the world.
  • It’s up to HR to determine which metrics will most help to leverage the headcount metric.

However, if your company employs part-time employees as well, several of them together may equal 1.0 FTE. To calculate the FTE for all employees in your company, consider the full-time and part-time employees you employ. 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. Eligibility for the Paycheck Protection Program — Eligible employers may receive limited financial aid to cover payroll costs, benefits, utilities, rent, or mortgage interests.

Her company has a 5-day work week, and full-time employees work 8 hours per day. According to the IRS and the ACA, part-time employees work fewer than 30 hours a week on average. This could be an employee who works 20 hours a week, an intern who works one day a week, or an employee who is on call or only works weekends.

How to calculate FTE for individual employees (+ examples)

meaning of fte can serve as a parameter for your decision-making as a manager regarding promotions, dismissals, division of tasks, training and talent development. Through this, you can identify the needs and internal capabilities of your employees more easily, as well as exercise more strategic management. The underlying period can be, for example, a day, a month or even a year.

FTE has several different uses and several different calculation methods, depending on why you want to calculate it. It will help you plan your project work, set deadlines, and work out your budget. An FTE calculation for all employees in a company needs to be rounded down to the nearest whole number (usually, 1.0 FTE or greater). 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.

The part-time employees, on the other hand, work 20 hours per week and 25 weeks out of the year. The FTE acronym stands for “full-time equivalent.” It is a unit, which shows the workload of a person, and whether they are considered full-time or part-time. FTE has various business purposes, from calculating how many full-time employees a business has, to calculating payroll and taxes, to making hiring decisions and even applying for PPP . The U.S. Office of Management and Budget, or OMB, the President’s budget office, will often place upper limits on the total number of FTE that a given agency may utilize each year.

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However, you’d want to average those hours over a time period such as four months. 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. To calculate FTE correctly, you’ll need to quantify your total weekly available work hours; it’s an important component of the calculation. Available hours per week is the number of hours your business considers standard work time multiplied by the number of employees you require to accomplish those related needs. If you’re trying to determine who is full time and part time for ACA purposes, use 30 hours per week as the criteria for a full-time employee.

Charlette has over 10 years of experience in accounting and finance and 2 years of partnering with HR leaders on freelance projects. She uses this extensive experience to answer your questions about payroll. To calculate an FTE salary, you must convert an employee salary into a full-time equivalent salary within a full year, regardless of whether the employee has a full-time or a part-time position.

FTEs in the workplace

But when you combine headcount with metrics like these, you can calculate other metrics, including FTE, employee turnover, and retention rates. These metrics help HR understand the development of their workforce and the steps needed to achieve optimal productivity and performance. Headcount reporting can also help you determine the TCOW and revenue per employee, allowing you to weigh the financial impact of the number of employees on the business.

To help you determine if you are eligible for a small-employer healthcare tax credit, you need to count the number of employees employed in your company throughout the year. As stated in the Eligibility for the Small Business Tax Credit Program section above, small businesses are eligible for such a tax credit if they employ less than 50 full-time equivalent employees . 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. According to OECD statistics on average weekly hours worked on the main job from 2021, Denmark has an average of 33.7 hours per week compared to Columbia and its average of 47.8 hours during a workweek. The US falls somewhere in the middle when compared to other countries, with 38.8 hours of work time per week, on average.

The allowances are sub-divided broadly into two categories- direct labor involved in the manufacturing process and indirect labor pertaining to all other processes. If you’re offering health coverage to remote workers, there may be some additional considerations. Read our employer’s guide to find out more about different types of insurance you can offer your employees. For example, a project that is estimated to take 600 hours of work can be accomplished in a variety of ways depending on your allocation of staff and time requirements. The workforce of an enterprise, activity, or country etc. can then be added up and expressed as the number of full-time equivalents. In the context of education the FTE unit attempts to standardize a student’s actual course load in comparison with the normal course load.


Multiply the total hours worked in a week by 52, the number of weeks in a year, to find the number of hours worked annually. Keep in my mind that some laws, including the ACA and the Paycheck Protection Program , require employers to use specific calculations to determine the number of FTEEs. Various federal, state, and local laws require that employees complete certain paperwork at the time of hire. These requirements generally apply to all new hires, regardless of full-time or part-time status. Employers often have questions about the differences between employee status, such as full-time, part-time, and full-time-equivalent employees, and how employment laws apply to these workers.

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. The key difference between headcount vs. FTE is that headcount tells you how many people are currently employed in your organization. Meanwhile, FTE tells you how many full-time hours are being collectively worked. Just indicate how many employees work at your company, how many hours they work a week, and for how many weeks.

One FTE equals 2,080 hours per year and the total number of employees is taken into account rather than the number of hours they have worked. Certain employees are not included in the calculation such as owners, partners, shareholders, family members or relatives, and seasonal workers who work fewer than 120 hours per year. In most cases, employers fall below the threshold required to be an ALE and are, therefore, not subject to the employer shared responsibility provisions. FTEs can help identify the number of full- and part-time workers an organization can hire, as well as the number of hours they should work. This is useful when determining employee outputs as schedules and budgets for part-time employees continue to change.

One part-time employee who works ten hours per week and one part-time employee who works 25 hours per week. A full-time equivalent is also useful when evaluating whether it’s more cost-effective to hire a part-time worker versus a full-time employee. Organizations can also calculate the pro-rata salary for part-time employees based on the FTE.

Being a basic criterion in staff controlling, it is one of the most important staff indicators for companies. Particularly due to the development in the part-time sector, your staff planning will be more comprehensible and controllable with this ratio. INVESTMENT BANKING RESOURCESLearn the foundation of Investment banking, financial modeling, valuations and more. Cassie is a deputy editor, collaborating with teams around the world while living in the beautiful hills of Kentucky.

Determining the amount of workers in your organization and the amount of time they work is crucial for budgeting, benefits administration and legal purposes. That said, full-time equivalent is a metric used to determine the total number of full-time workers that you have in an entire organization. In this article, we’ll teach you everything that you need to know about calculating this metric and why it matters. Full-time equivalent is calculated by dividing an employee’s scheduled hours by the company’s work scheduled hours on a weekly full-time basis. Additionally, different federal programs might give a credit to small business owners depending on the types of employees they have and the number of hours they are working.

To delve further into the matter, let’s look at how FTEs are calculated. This blog does not provide legal, financial, accounting, or tax advice. ADP does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog.

  • FTE is often used to measure a worker’s or student’s involvement in a project, or to track cost reductions in an organization.
  • Divide the total hours worked by the number of full-time hours for the given time period to find the FTE.
  • – 5 p.m.” If employees take a one-hour lunch, then the available hours per workweek is 40 hours .
  • To calculate the number of hours your employee is expected to work based on their FTE, you’ll need to reverse the previously mentioned process of calculating FTE based on the number of hours worked.
  • Marija Kojic is a productivity writer who’s always researching about various productivity techniques and time management tips in order to find the best ones to write about.
  • When it comes to staffing, one of the most important metrics is the number of full-time equivalent employees, or FTEs.

Employers can also monitor workloads for future budgeting and staffing with FTE. 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. Three of them work full-time and the rest work 10 and 5 hours in total. 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. FTE calculations are also important when determining eligibility for certain federal programs and benefits. Three full-time employees would have an FTE of 3.0 and the part-time FTE is 0.875.

California also requires rest breaks for every four hours worked, unless an employee works less than 3.5 hours in the workday. The number of hours worked in a particular week determines whether an employee is entitled to overtime pay, not whether they are considered full-time or part-time. Under federal law, overtime is due whenever a non-exempt employee works more than 40 hours in a workweek. A few states also require overtime when employees work more than a certain number of hours in a workday, among other situations. The result you get is the total hours worked by all the employees in your business. 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.

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For example, if an employer considers 40 hours per week as full-time, employees who work 40 hours each per week count as 1.0 FTE, while those that work 20 hours per week, or part-time, make 0.5 FTE. In this case, two part-time workers would count as 1.0 FTE, and four part-time workers would count as 2 FTE. Various combinations can be created depending on the needs of the business. To calculate the total FTE, add the number of FTEs worked by full-time employees (1 FTE for each full-time worker) to the part-time FTE you calculated in step five. To identify the FTE of part-time employees, divide the total hours worked by part-time employees by the annual hours worked by one full-time employee (i.e., 2,080 hours).

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