What is full-time equivalent and how to calculate it + free FTE calculators

full time equivalent calculator

The larger your company, the more data you will need to aggregate and the more complicated the formulas for calculating your workforce full-time equivalent will become. This is mostly the case if your company has several establishments. If your company is a large account, there are other ways to help you save time and simplify this process. In all cases, you should choose the most efficient solution for your company, taking into account the financial and time investments. fte meaning FTE allocation value is the hours available for a resource to work on a project based on the resource calendar divided by available hours based on the Standard Calendar. Clarity computes the total number of hours and uses the Standard Calendar to convert it up thru the Task WBS and up to the Investment. Full Time Equivalent refers to the unit of measurement equivalent to the daily availability rate of a company standard work day, applicable in a variety of contexts.

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  • FTE is the number of full-time equivalent hours all your employees work.
  • Of course, employee profitability factors heavily into hiring decisions.
  • You can use the FTE total each week, month, or year to determine company growth.

Start tracking your full time employees and all part time employee hours now for the upcoming requirements so you are prepared for Employer Penalty starting January 1, 2015. Small businesses are eligible for small-employer health care tax credit — they apply to employers who employ less than 50 full-time equivalent employees. Full-time equivalents help managers, business owners, and HR team members better understand existing costs to the business, as well as more effectively plan for future hiring needs. If, for example, your organization has 300 full-time employees and 1,000 part time contractors who work a varying number of hours, FTE calculations can simplify the total number of employees or hours worked. Thus FTE, termed Full-Time Equivalent is a unit that represents the total hours worked by a full-time employee on a regular basis. The costing team uses the concept of converting the work executed by part-time employees as compared to full-time employees.

Do I have to offer health insurance?

In our example, we calculated Janet at 1.25, Tom at 1.0, Ryan at 0.5 and Gina at .25. Information provided by PSST, LLC concerning the Affordable Care Act is not legal advice and should not be treated as such. If you have questions about how the Affordable Care Act will affect you as an employer, please consult legal counsel. Since you have less than 50 Total Equivalent FT Employees, you do NOT qualify as an Applicable Large Employer for 2018 ACA compliance and reporting. Since you have more than 50 Total Equivalent FT Employees, you qualify as an Applicable Large Employer for 2018 ACA compliance and reporting.

Calculating FTEs will also determine an employer’s duties under the shared responsibility provisions of the Affordable Care Act. 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. FTE calculations are also important when determining eligibility for certain federal programs and benefits. There are 8 working hours in the day on Monday, and the DEF Company staff works 136 hours during that day. When 8 working hours are divided into 136 hours, the result is 17 FTEs. There are 168 working hours in January, and the ABC Company staff works 7,056 hours during the month. When 168 hours are divided into 7,056 hours, the result is 42 FTEs.

Importance of FTE

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full time equivalent calculator

In our example, the company gives all its workers the same four weeks off, but employees may have different benefits packages in some companies, which may change the FTE calculations. For instance, part-time https://www.bookstime.com/ employees may not receive as many days off as their full-time colleagues. Rather than hiring new employees, businesses can use FTE to deploy staff across various departments thereby keeping costs down.

Quick Employee Cost Estimates

The exact number will depend on the country where the employment is occurring, since the number of holidays varies by country. Let’s say that you need to calculate the total amount of hours, time, and money required for your business to run successfully.. FTE is the answer, full time equivalent will help you do this. To track employee work hours and decide whether your employees are full-time equivalents, there are a lot of great tools for tracking teams. This is how a company, on average, calculates the average yearly number of hours that a full-time employee works. 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.

full time equivalent calculator

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.

According to the ACA, part-time hours are considered anything less than 30 hours per week. Like we mentioned, some employees count 37.5 to be the standard workweek, which is the number of hours actually worked when you exclude the breaks. This calculation is a monthly procedure that can change accordingly for each month. Part time employee’s total hours for the month can change the status of number of full time employees.

And also for small business owners to see if they can apply for a tax credit in the amount of 50% of the employer-paid health care premiums. Calculate the number of working hours of full-time employees per period. A regular employee is someone who works a maximum of 40 hours each week for more than 120 days each year.

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