Consequently, the FTE for a part-time employee working 20 hours a week would be 0.5. If a company has a workweek of 40 hours, then employees with FTEs of 0.5, 0.75, and 0.8 should work a total of 20, 30, and 32 hours per week, respectively. There are several ways to break down that 62.5, depending on your needs. You could choose to assign six full-time employees and one part-time employee to work on the project for 10 days. Or you could allocate work to 12 full-time and one part-time resource for five days.
FTE for Hybrid Teams and Remote Teams
If an employee’s weekly earnings are above the primary threshold but below the secondary threshold, they will pay Class 1 NICs at a rate of 12.5%. Get familiar with how to determine salary for a position with job analysis, market data, and pay grades to set fair, competitive compensation. The other three are part-time and worked 1,200 hours, 800 hours, and 600 hours. To monitor it effectively, it’s necessary to understand the calculation’s core components. Companies use FTE to make decisions about hiring, scheduling, and resource allocation. Scalable solutions for businesses of + employees to meet diverse needs.
- Accurately tracking full-time equivalent employees keeps you compliant, no matter where your team is based.
- Keep this in mind when calculating the FTE to get a realistic picture of work capacity.
- This makes it possible to plan and manage your budget more accurately, and to identify cost savings by looking at the ratio between hours worked and costs.
- Calculating FTE transforms how your organization manages labor costs and workforce planning.
- Whether you’re managing headcount, planning budgets, or ensuring compliance, an FTE calculator helps simplify the math and boost accuracy.
- For example, five part-time employees might represent fewer FTEs than their head count suggests.
How to adjust FTE calculations for different full-time definitions
So, while Company B’s workforce is 55 individuals (40 full-time and 15 part-time) it only has the equivalent of 47.5 full-time employees each fte acronym month. So, while Company A’s workforce is 60 individuals (40 full-time and 20 part-time) it only has the equivalent of 50 full-time employees each month (40 full-time plus 10 FTEs). The FTE calculation is used to determine if an organization is an Applicable Large Employer (ALE) under the ACA. These examples show how FTE calculations can be adapted based on different working hours and staff mixes — offering clear, practical insights for business planning and compliance. A company has 2 full-time employees (40 hours each) and 3 part-time employees (10 hours each). A company has 3 full-time employees (40 hours each) and 2 part-time employees (20 hours each).
Step-by-Step FTE Example
Because regulations differ significantly by region, you should consult official government websites or speak to a legal advisor. If you operate across multiple states, provinces, or countries, consider that each jurisdiction could apply different FTE thresholds. Always periodically review your FTE numbers, significantly when your workforce expands or contracts. Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks. The chart below displays the number of weekly hours worked with the corresponding FTE under the standard 40 work-week.
How technology can help you calculate FTE
The manager, administrative assistant and salesperson each work 40 hours per week (2,080 per year). Multiply 2,080 by three to calculate the annual number of hours worked by all three employees. Many organizations use a 40-hour workweek, but it depends on your location and policies. For example, you may use 32 Liability Accounts if your company offers a four-day workweek.
Are interns taken into account when calculating FTE?
It is applied in law and business as it helps to plan resources, https://www.bookstime.com/ budget and comply. It will be able to employ 150 payroll personnel and might employ a few part-time employees. Employers can also use FTE meaning business to schedule work and staff, especially for part-time and full-time employees.
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