On this article, I present you step-by-step calculations for company-wide FTE, part-time FTE, particular person FTE, and part-time wage-to-FTE wage conversion.
What do providing worker well being advantages and planning workforce capability have in frequent? You want a metric referred to as FTE, or full-time equal, to work out each—however many corporations don’t know what that is or the right way to calculate it.
In just some steps, I’ll present you the right way to calculate FTE for part-time staff, particular person staff, and your entire firm. I additionally cowl the right way to calculate FTE salaries from part-time wages.
Key Takeaways
- The complete-time equal, or FTE, represents the theoretical variety of full-time employees that may ship all of your group’s work hours. That is completely different out of your headcount, which is the precise variety of staff—full-time and part-time—in your enterprise.
- When you have over 50 FTEs, you should adjust to the Inexpensive Care Act (ACA) laws and provide ACA-compliant advantages to all full-time staff.
- You’ll be able to calculate the FTE on your whole firm, your part-time workforce, and particular person staff. You want an up-to-date checklist of part-time and full-time staff, and their contracted or precise hours, to carry out these calculations.
- Calculating the FTE for particular staff lets you convert their part-time wages (e.g., hourly or month-to-month) to full-time salaries. You would possibly do that to measure pay fairness throughout your group or transition part-time staff to full-time positions (or vice-versa).
What Is Full-Time Equal (FTE)?
Your full-time equal (FTE) is the hypothetical variety of full-time staff who’d be working all of the hours your group works.
Say you may have 2 staff: a full-timer working 30 hours per week and a part-timer working 15 hours per week. In case your normal full-time place requires 30 hours per week, then your part-timer contributes half as many hours as a full-time worker, so your company-wide FTE is 1.0 + 0.5 = 1.5.
Your FTE is completely different out of your headcount. The headcount is the variety of precise staff who work on both a full- or part-time foundation. In the meantime, the FTE is a theoretical quantity indicating what number of full-time positions may ship all group hours.
| Full-time equal system FTE = Complete weekly employees hours (part-time and full-time)Normal weekly full-time hours |
🧠 Did You Know?
The acronym “FTE” has 2 completely different meanings throughout HR content material. On this article, for example, I primarily discuss in regards to the FTE calculation and use the phrase as a unit of measurement. In the meantime, some steerage on labor laws might use it as a shorthand for “full-time equal staff” (saying issues like, “companies with 1-50 FTEs are eligible”). I’ll use the time period this fashion, too.
Why Calculate FTE?
Figuring out your FTE helps you in 2 large methods.
First, it helps you meet federal employment legal guidelines in the USA. For instance, underneath the Inexpensive Care Act (ACA), corporations with 50 FTEs and over are thought-about Relevant Giant Employers (ALE) and should present ACA-compliant advantages to full-time staff.
Additionally, small companies with underneath 50 FTEs may qualify for the federal government’s Small Enterprise Well being Choices Program (SHOP). The Inner Income System (IRS) defines full-time hours as 30 hours per week (or 130 hours a month) and above.
Second, internally, monitoring your FTE helps you measure group capability and make staffing choices. For instance, say an organization that solely hires part-time staff wants at the least 1 FTE per consumer all year long. If, in any given month, its FTE falls under 1 per consumer, the agency should enhance worker hours or rent new employees.
Understanding the typical value of an FTE can assist you finances and forecast future staffing prices. Say it’s $50,000 yearly—you possibly can higher consider the monetary affect of increasing your group.
📚 This Would possibly Curiosity You:
You have to keep on prime of the newest federal and state labor legal guidelines to keep away from authorized, monetary, and reputational damages. Learn our information on the right way to foster office compliance to cowl all of the bases.
How To Calculate FTE in 5 Steps
Under are some step-by-step FTE calculations. I cowl just a few choices—the right way to calculate FTE for all staff, part-time employees, and particular person staff. I additionally use a real-world instance to place principle into follow.
Outline full-time hours
Until you’re going with the IRS benchmark (30 hours per week), resolve what variety of weekly hours is the usual for a full-time place in your organization. Widespread choices embody 30, 35, and 40 hours per week. The theoretical “worker” in your FTE calculation works this normal variety of hours.
| Instance Within the firm Hypothetical, a full-time worker works 40 hours per week. |
Checklist your staff and their hours
Export an up-to-date checklist of all of your part- and full-time staff, and the variety of hours they work per week, month, or yr. You could be storing this data in an worker database app or Excel spreadsheet.
💡 Professional Tip:
Some corporations make use of employees who take prolonged go away and sabbaticals—or swap between full-time and part-time work. If that’s your enterprise, double-check the accuracy of your worker information. It should embody staff’ contracted or precise hours, together with paid go away however excluding unpaid go away.
In your worksheet, make sure you’re monitoring:
- Worker first and final identify
- Worker ID, the place related
- Half-time or full-time employment sort
- Complete hours
- Time period you’re taking a look at (i.e., weekly, month-to-month, or yearly)
- Sort of hours (i.e., contracted or precise)
🧠 Did You Know?
Full-time staff often work contracted hours—that’s, the minimal variety of hours per week they have to put in, per their employment contract. They may work extra, however can’t invoice for them. In the meantime, part-timers can have contracted hours or work as hourly staff. Within the latter case, they often report their hours in a timesheet, with a time tracker, or in a communication to their supervisor.
You should not embody unbiased contractors (Kind 1099 staff), freelancers, seasonal staff (working lower than 120 days a yr), or the corporate’s companions and enterprise homeowners in your worksheet.
Instance
| First identify | Final identify | Variety of hours | Sort of hours | Frequency | Employment sort |
| Mel | Bea | 40 | Contracted | Weekly | Full-time |
| Kat | Blanchett | 20 | Precise | Weekly | Half-time |
| Bob | Pitt | 40 | Contracted | Weekly | Full-time |
Calculate the FTE on your part-time workforce
First, let’s work out the FTE on your part-time staff solely. This quantity tells you the contribution of part-timers to your general FTE depend. It may possibly assist you to evaluate your workforce capability between full-time and part-time employees.
This calculation has 2 steps:
1) Add up all hours labored by part-time staff.
2) Divide the entire part-time hours by the usual full-time hours (outlined in step 1).
| Instance 1) In our 3-person workforce, complete hours of part-time staff (per week) = 20 2) Half-time FTE = Complete part-time hours / Normal full-time hours = 20 / 40 = 0.5 FTE Which means that the part-time staff (there’s only one) signify 0.5 theoretical full-time staff, which implies they do half the work of 1 FTE. |
Calculate the corporate FTE
Subsequent, your company-wide FTE reveals you what number of complete FTEs you may have and tells you when you’re an Relevant Giant Employer (ALE) for ACA compliance. That is the quantity that’s typically merely known as “FTE.”
Listed below are 2 calculation strategies you should use.
Methodology 1: Sum up the FTE for part-time staff along with your full-time worker headcount. There’s no class aside from full-time and part-time staff that goes into your FTE calculation, and your full-time FTE is similar as your full-time headcount.
| Instance We already know that our part-time FTE = 0.5 FTE Our full-time worker headcount is 2 (particularly, Mel Bea and Bob Pitt). Firm FTE = Half-time FTE + Full-time worker headcount = 0.5 + 2.0 = 2.5 FTE |
Methodology 2: Sum up all worker hours (part-time and full-time). Then, divide this quantity by the usual full-time hours (outlined in step 1).
| Instance Summing up the hours from our worker information sheet, we get: Complete hours (per week, part-time and full-time) = 40 + 20 + 40 = 100 Firm FTE = Complete hours / Normal full-time hours = 100 / 40 = 2.5 FTE |
As you possibly can see, each strategies produce the identical FTE end result: The workforce has a complete of two.5 theoretical full-time staff.
Calculate the FTE for a person
When a employee’s weekly hours are increased or decrease than your normal full-time hours, you could wish to calculate what number of FTEs (i.e., theoretical full-time staff) they signify. For instance, if somebody’s depend is 1.5 FTEs, they’re working one-and-a-half extra hours than a full-time worker. A person-level FTE helps you measure worker efficiency and convert their pay to a full-time wage.
You calculate an worker’s FTE by dividing their hours by the usual full-time hours.
| Instance The one part-time worker in Hypothetical is Kat Blanchett, who works 20 hours per week. Particular person FTE = Worker hours / Normal full-time hours = 20 / 40 = 0.5 FTE This implies Kat represents half of a theoretical full-time worker. On this case, since they’re the one part-time worker, their particular person FTE is the same as the corporate’s part-time FTE. |
I used a part-time work instance, however you would possibly wish to know the right way to calculate FTE for salaried staff, too. A full-time worker is often 1.0 FTE as a result of they are typically salaried and exempt underneath the FLSA. When you have salaried non-exempt employees, although (e.g., mechanics or live-in assist), they’re eligible for extra time hours and you could wish to know their FTE depend. Use the identical FTE calculation as within the calculation above.
📚 This Would possibly Curiosity You:
Study extra in regards to the distinction between exempt and non-exempt staff.
How To Calculate an FTE Wage
You would possibly calculate FTE wages for part-time staff to examine whether or not they’re honest in contrast with these of full-time staff doing comparable duties. In flip, this evaluation helps you obtain pay equality in your group, resolve compensation for brand new hires, and transition part-time staff to full-time positions (and vice versa).
Right here’s the way you calculate the full-time equal wage utilizing a part-time wage.
First, carry your part-timer’s wage throughout the identical timeframe as a full-time wage (which is often annual). Listed below are the formulation to transform month-to-month, weekly, day by day, and hourly wages to annual pay figures.
- Annual pay = Month-to-month wage x 12
- Annual pay = Weekly wage x 52
- Annual pay = Every day wage x 52 x Variety of working days per week
- Annual pay = Hourly wage x 52 x Variety of working hours per week
Now you may have your part-timer’s annual pay, convert it to an FTE wage with this system.
FTE wage = Half-time annual pay x (1 / Particular person FTE)
| Instance We’ll use Hypothetical’s worker information as soon as once more. Let’s assume Kat Blanchett, who works 20 hours per week, earns $30/hour. From earlier calculations, we all know their particular person FTE is 0.5 FTE. Annual pay (part-time) = $30 x 52 x 20 = $31,200 FTE wage = $31,200 x (1/ 0.5) = $31,200 x 2 = $62,400 |
💡 Professional Tip:
Whereas useful and simple to calculate, the FTE wage conversion doesn’t present you different prices of full-time and part-time positions. So, be sure you do a radical labor value evaluation. For instance, take into account the extra employer taxes and firm advantages hooked up to full-time positions when you’re transitioning part-timers to full-timers. In the event you’re changing full-timers with part-timers for a similar variety of hours labored, take into account the prices of coaching and managing further individuals.
Observe Employees’ Hours and Wages With Connecteam
A full-time equal, or FTE, tells you what number of full-timers you’d theoretically have to work all of your firm hours. You want it to remain compliant with the Inexpensive Care Act, however you may as well use it to measure workforce capability and efficiency. You don’t want a lot to calculate FTE—simply your staff’ names, hours labored, and full-time/part-time statuses.
The information should be up-to-date and correct, although. Use worker listing software program like Connecteam to retailer particulars securely, have a single supply of fact, and simply export customizable information sheets. As a bonus, Connecteam additionally lets staff monitor time utilizing a 1-click time clock, making certain your FTE calculations for part-timers and non-exempt employees embody correct hours labored.
Strive Connecteam as we speak—it’s free!
FAQs
What’s the system for calculating FTE?
The system for calculating FTE is:
FTE = Complete weekly employees hours (full-time and part-time) / Normal weekly full-time hours
What number of hours is 0.8 FTE?
In case your group’s full-time weekly dedication is 40 hours per week, then:
Complete weekly hours = FTE x Normal weekly full-time hours = 0.8 x 40 hours = 32 hours
The system for yearly hours is:
Complete annual hours = FTE x Normal weekly full-time hours x 52 = 0.8 x 40 x 52 = 0.8 x 2,080 hours = 1,664 hours
How do I calculate FTE in Excel?
To calculate FTE in Excel, checklist your worker names and variety of weekly hours in 2 separate columns. On the backside of the hours column, add up all worker hours utilizing the Excel SUM operate. Then, within the cell that calculates your organization FTE, divide this complete hours worth by your normal weekly full-time hours (e.g., 40 hours per week).
Disclaimer: The content material of this text is informational solely and shouldn’t be thought-about authorized recommendation. Please seek the advice of an HR or authorized skilled and examine official authorities steerage earlier than making enterprise choices.
