What is the productive capacity of your company? In other words, do you know what the full time equivalent is and how it can help you better understand the needs of your organization? If you don’t know what it means, you should, as this metric can help you make important decisions. Through the full time equivalent calculation, it is possible to identify whether your small business needs to hire, restucture or reduce its staff, for example.
The full-time equivalent is an indicatorthat answers many of the questions Human Resources departments need answers to. This, therefore allows them to make better decisions regarding personnel management. Want to learn more about what it is and how it can help you? Keep reading.
- What Does FTE Mean?
- Why Calculate the Full Time Equivalent?
- How to Calculate the Full Time Equivalent
- Full Time Equivalent Calculator
- ✅Time Off Management Software for employees
What Does FTE Mean?
First, let’s look at what full-time equivalent or FTE actually means. The full time equivalent, often abbreviated as FTE is an indicator that reflects an employee’s productive capacity. An FTE of 1.0, for example, corresponds to the hours worked in a day for a full-time employee. Consequently, the FTE for a part-time employee working 20 hours a week would be 0.5.
The full-time equivalent converts the hours worked by part-time employees into hours worked by full-time employees.
Like revenue per employee , this indicator is of great importance for strategic HR management. As they indicate how much manpower a company has. In other words: they allow you to calculate the real performance of a work team, a specific department, or the entire organization.
Example:
10 people are employed in a company. Five of them work full-time (40 hours per week), three occupy a part-time position each working 20 hours a week, and the other two each work 10 hours per week. The FTE or FTE value, in this case, is 7.0.
The calculation:
A full-time position corresponds to an FTE of 1.0. Accordingly, 5 full-time positions result in an FTE of 5.0.
A part-time position (20 hours) corresponds to an FTE of 0.5. With three part-time positions, this results in a value of 1.5.
10 hours per week correspond to an FTE of 0.25. With two 10-hour digits, this results in an FTE value of 0.5.
As you can see, the part-time employees are converted into the performance of a full-time employee. So the FTE is not the number of employees in a company, but the equivalent of a full-time employee. Because the number of employees says nothing about a company’s actual work performance.
Why Calculate the Full Time Equivalent?
The conversion of part-time employees into full-time employees provides information on the productivity of the company’s workers, whether by team or department. This has a number of advantages:
- Performance analysis: The full time equivalent helps to ensure effective employee performance management. With the FTE, it is possible to get a more accurate picture of how employees are performing. More important than knowing the number of employees in a company, is to understand their overall performance.
- Improved decision-making: With the calculated value, important HR decisions can be made. For the HR department, full time equivalent is therefore particularly important for annual HR planning and for managing labor costs. In this way, changes in teams and trends in the job market can be better assessed.
- Easier to plan new projects: Employees with different types of employment contracts can be more easily assigned to projects, as an employee’s performance can be better calculated – no matter how many hours they work per week.
- Respect for legislation: The FTE determines which employment laws and compensation laws apply within a company. Additionally, HR checklists for small businesses can help to stay on top of compliance with federal and state laws.
- Accurate comparison: The productive capacities of different companies and departments can be compared more easily with FTE. This is because if you compare only the number of employees, the results are very inaccurate.
How to Calculate the Full Time Equivalent
FTE can be calculated quickly in four simple steps.
Based on an FTE of 1.0, we calculate employees work 2,080 hours per year. This does not include holidays and days of absence. Furthermore, this value is used only as a basis for calculating the annual FTE and reflects the hours of an employee who works 5 days a week, 8 hours a day.
Full Time Equivalent Formula
It is possible to calculate the full time equivalent using the following simple formula:
(Total number of hours for all part-time employees + the total number of hours for all full-time employees) / period for calculation (2080 for annual FTE, 173.33 for monthly FTE or 8 for daily FTE ) = Final FTE
Divided into several clear steps, the account looks like this:
Step 1
First, it is necessary to determine the number of hours worked by part-time employees.
Formula:
Part-time employees x total number of hours per week x number of weeks (that an employee has worked) = total hours worked over the given time period
Example:
5 part-time employees work 25 hours a week for 30 weeks.
2 part-time employees work 10 hours a week for 25 weeks.
Account:
5 x 25 x 30 = 3750 hours
2 x 10 x 25 = 500 hours
To obtain the total number of hours worked by all part-time workers, add the two results together:
3750 + 500 = 4250 part-time
Step 2
Now determine the number of hours worked by full-time employees over a given period. Full-time employees are those who work a minimum of 30 and a maximum of 40 hours a week and more than 120 days a year.
Formula:
Full-time employees x working hours per week (40) x 52 weeks per year = total working hours of full-time employees per year
Example:
7 full-time employees work 40 hours a week
Account:
7 x 40 x 52 = 14,560 hours full time
Step 3
Now add the total number of hours worked by full-time employees to that of part-time employees to get the total number of hours for all employees.
Formula:
Total hours of full-time employees + total hours of part-time employees = total hours worked by all employees per year
Account:
4250 (part-time) + 14,560 (full-time) = 18,810 total hours
Step 4
In the last step, just divide the total number of hours of full-time employees and part-time employees (in our example 410 hours) by the number of regular full-time hours (in our example 2,080 hours per year or 40 hours x 52 weeks ) to generate the full time equivalent for a certain period of time.
Formula:
Total number of hours for all employees / 2080 = FTE
Account:
18,810 (total number of hours) / 2,080 = 9.04 FTE
To obtain the full time Equivalent for a month, divide the total number of hours by 173.33 (2,080 hours / 12 months).
For example, if the total number of hours in the month of March were 2,800, the account would look like this:
2,800 (total number of hours) / 173.33 = 16.15 FTE (FTE)
To find the equivalent of a full-time day, divide the total number of hours by 8.
For example, if the total number of hours were 75, the calculation would look like this:
75 (total number of hours) / 8 = 9.38 FTE (FTE)
The result is the full-time equivalent of 9.04. With 14 employees, 7 of which are full-time and 7 part-time, the staffing capacity is 9.04 full-time employees per year.
Full Time Equivalent Calculator
If you want to save time, why not use our free full time equivalent calculator template for excel to easily work out your company’s FTE.
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.
Do you want help with the management of your company’s key figures, helping your team make the right decisions, and implementing the right measures in personnel planning? Then Factorial is the best option for you.
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FAQs
How do you calculate full-time equivalent FTE tool? ›
The calculation of full-time equivalent (FTE) is an employee's scheduled hours divided by the employer's hours for a full-time workweek. When an employer has a 40-hour workweek, employees who are scheduled to work 40 hours per week are 1.0 FTEs. Employees scheduled to work 20 hours per week are 0.5 FTEs.
How do you calculate full-time equivalent pay? ›To calculate the FTE value for a specific position, simply divide the number of hours worked by the number of hours considered to be full-time. If you use 40 hours as full time, someone who works 35 hours has a 0.875 FTE. Someone who works 30 hours has a 0.75 FTE.
How do you calculate whole time equivalent hours? ›The Full Time Equivalent (FTE) / Whole Time Equivalent (WTE) is calculated by dividing the number of required hours for the role by the whole time equivalent (37.5 hours). The FTE / WTE entered in Trac must be less than or equal to the FTE / WTE against the position number in the Electronic Staff Record (ESR).
What is 4 hours in FTE? ›Let's take an example to understand how to calculate work hours in FTE. 40 hours a week (1 FTE), i.e., 8 hours for 5 days, are the standard working hours at your firm. So, if you have 3 full-time employees and 2 part-time employees working 3 days a week, then the total FTE becomes (3*1) + (2*0.6) = 4.2.
What is of full-time equivalent? ›A full-time equivalent, sometimes abbreviated as FTE, is a unit to measure employed persons or students in a way that makes them comparable although they may work or study a different number of hours per week.
How do you calculate full-time equivalent students? ›FTE is derived by dividing student credit hours by the full-time, full-year equivalent for the given level. For example, FTE for undergraduate students can be calculated by dividing undergraduate student credit hours by 45.
How do you calculate full-time employee percentage? ›Divide the number of working hours by the number of hours in a full-time work week, and multiply this by 100. For example: a full-time work week is in this case 40 hours, but Corinne will be working 34 hours. The calculation will then be: (34/40) * 100 = 85%. This number should be filled in at percentage employment.
What is the difference between full-time equivalent and full-time employee? ›A full-time equivalent (FTE) is a unit of measurement used to figure out the number of full-time hours worked by all employees in a business. If your business considers 40 hours to be a full-time workweek, then an employee working 40 hours per week would have an FTE of 1.0.
Is there a formula to calculate hours worked? ›Just multiply the hours worked per day by the number of days worked per week. If an employee works different schedules every day, then you will need to calculate hours worked for each day. You will then need to add up the total for each day to get their hours worked in a given week.
How do you calculate total hours and minutes? ›
If you want to convert hours and minutes to just hours, divide the minutes by 60 and add the unchanged hours. If you want the result in minutes, multiply hours by 60 and add the unchanged minutes.
How do you calculate FTE for 8 hour shifts? ›- Count the Number of Hours Worked by Part-Time Employees.
- Count the Number of Hours Worked by Full-Time Employees.
- Add the Number of Hours Worked by Both Part-Time and Full-Time Employees.
It can refer to the time it takes a new recruit to ably complete every aspect of their job role as measured by their manager. Or, it can refer to the time it takes a recruit to reach an equivalent level of performance as their closest colleagues.
How many hours is 5 FTE? ›Knowing each employee's FTE, you could assign five full-time employees to work 80 hours or 10 days. Alternatively, you could use four part-time employees with 0.5 FTE and three full-time employees working over 10 days to complete the project.
What is the formula for employee capacity? ›Example: A company has 10 employees. Each employee works 40 hours per week. 40 x 10 = 400 hours.
What are FTE hours for a project? ›FTE example
For example, if you have one employee who worked 50 hours, one employee who worked 10 hours, and one employee who worked 40 hours on a project in a given week, that adds up to 100 total hours worked that week; assuming a full-time employee works 40 hours per week, your FTE is 2.5.
Here's how you calculate time in a daily Excel timesheet template: Insert =sum(D8+F8) into the "Daily total" cell (marked as G8 in this timesheet example). As soon as employees type the hours in the "Morning hours" and "Afternoon hours" cells, this time automatically gets added to the "Daily total".
What is an FTE analysis? ›Headcount Full-Time Employee (FTE) Analysis is intended to answer the primary question: How many and what type of employees did I employ over time? This question implies that the user is interested in a summarized picture of headcounts in their organization.
What is 100% full-time equivalent? ›A full-time employee working 40 hours in a company that views 40 work hours as a full-time schedule is counted as having a 1.0 or 100% FTE (40 / 40 = 1.0 FTE). In line with that, you may have 10 full-time employees, who'll equal 10.0 FTEs in total (1.0 FTE each).
How many hours per month is full-time equivalent? ›With full-time equivalents, you should assume one FTE will work a 40 hour workweek. A quick and easy method of calculating monthly hours is to multiply 40 hours per week by 4 weeks, yielding 160 hours for the month.
How do you calculate FTE for teachers? ›
Full time equivalency for Supplemental Faculty can be calculated by taking the total teaching credit hours (which are generally equivalent to the credit value of the course(s) taught) for each Supplemental Faculty and dividing by 12. A broadly accepted standard for a full-time teaching load is 12 hours.
How do you calculate FTE for 12 hour shifts? ›Add the hours worked by part-time employees to the hours worked by full-timers to get the total hours. Divide the total hours worked by the number of full-time hours for the given time period to find the FTE.
How do you calculate total hours in payroll? ›- Step 1: Determine start and end time. Simple as that---record what time you start and what time you end. ...
- Step 2: Convert time to military time. ...
- Step 3: Subtract start time from end time. ...
- Step 4: Subtract unpaid breaks. ...
- Step 5: Convert to decimal format. ...
- Step 6: Add up total hours for pay period.
The magical number for one full-time equivalent (1-FTE) professional is 2,080 work hours annually — 40 work hours per week for 52 weeks in a year. Professionals can work extra hours during non-vacation weeks to make up for opportunities lost during vacation weeks.
What is full-time equivalent workload? ›FTE is often used to measure a worker's or student's involvement in a project, or to track cost reductions in an organization. An FTE of 1.0 is equivalent to a full-time worker or student, while an FTE of 0.5 signals half of a full work or school load.
What is the formula for calculating time? ›The formula for time is given as [Time = Distance ÷ Speed]. To calculate the speed, the time formula will be molded as [Speed = Distance Travelled ÷ Time].
How to calculate time difference? ›- Use the 24-hour format to make it easier to compute. ...
- Subtract all end times from hours to minutes. ...
- Proceed to subtract the start time minutes to the end minutes.
- Subtract the hours too from end to start.
- Combine the hours and minutes results together to arrive at the answer.
To get the total decimal minutes we use the formula: m = (hours * 60) + minutes + (seconds / 60). To get the total decimal seconds we use the formula: s = (hours * 3600) + (minutes * 60) + seconds. Note that; 1 hour is equal to 60 minutes or 3600 seconds.
How many hours is .80 FTE? ›For example, a . 80 FTE would be required to work 1670 hours in fiscal year 2022 (2088 X . 8 = 1670).
How many 8 hour shifts is 40 hours a week? ›The schedules that average 40 hours a week always use five 8-hour shifts per week or four 10-hour shifts per week.
How many hours a week is 0.9 FTE? ›
Full time: FTE stands for Full Time Equivalent. If you work 40 hours per week, you are a 1.0 FTE. If you were hired to work three 12-hour shifts, you are a 0.9 FTE (even if you work overtime or frequently reach 40 hours). A 0.5 FTE is typically 20 hours a week.
Is .7 FTE considered full-time? ›A full-time equivalent employee is a worker with an FTE of 1.0, which will usually mean they're employed full-time at your company. A full-time employee is considered to work at least 30 hours per week on average. The FTE employee doesn't have to actually exist, and can be a combination of part-time employees.
Is .8 FTE considered full-time? ›FTE basically means full time employee, so 1 fte would be a worker who works 80 hours per 2 weeks. . 8fte or . 9 fte would probably be used for nurses who work 72 hours per 2 weeks. . 6 fte would probably be for a part time employee.
What is productivity to time ratio? ›The labor productivity ratio is a metric expressing the number of work units produced per time worked. productivity ratios essentially quantify output/input, with input being time worked and output being work units.
What is 10 hours per week in FTE? ›10 hours per week correspond to an FTE of 0.25. With two 10-hour digits, this results in an FTE value of 0.5. As you can see, the part-time employees are converted into the performance of a full-time employee. So the FTE is not the number of employees in a company, but the equivalent of a full-time employee.
What is the FTE for 35 hours per week? ›For example, most employers require full-time employees to work 35 to 40 hours per week. If an employee works 35 hours per week, they represent one FTE. Alternatively, if an employee is scheduled to work only 17.5 hours per week, they represent 0.5 FTE.
How many hours is 3.5 FTE? ›If a full-time employee works 40 hours per week, the FTE is calculated as 140/40 equaling 3.5 FTEs. Annual Work Units or AWU is sometimes used instead. AWU and FTE are the same.
What is the average FTE simplified method? ›To calculate the average FTE for each employee, Borrowers need to accumulate the total hours paid during the Covered Period (and chosen Reference Period) and divide the average number of hours paid per week during the relevant period by 40, and round to the nearest tenth.
Can QuickBooks calculate FTE? ›If you're not sure where to start to track FTE, consider using QuickBooks Time , which helps organize employee hours and delivers helpful insights into your FTE calculation.
What is FTE metrics? ›Full-Time Equivalents (FTE) is a calculated metric that adds all of the true full-time employees to the fractional values for all part-time employees, contractors, students and interns.
How do you calculate FTE and headcount? ›
Let's say you have 50 full-time employees working 40 hours per week and 12 part-time employees working 20 hours per week. Those 12 part-timers work the same amount of time as six full-time workers. So your headcount would be 62 (50 + 12), but your FTE would be 56 (50 + 6). One full-time employee's FTE is 1.0.
How do you calculate average full-time employees? ›To calculate the annual average number of employees your establishment paid during 2022, you must calculate the total number of employees your establishment paid for all periods. Add the number of employees your establishment paid in every pay period during calendar year 2022.
How do you calculate average FTE per month? ›To obtain the full time Equivalent for a month, divide the total number of hours by 173.33 (2,080 hours / 12 months). To find the equivalent of a full-time day, divide the total number of hours by 8. The result is the full-time equivalent of 9.04.
What is the full form of FTE? ›Full-time equivalent, or FTE, measures the total amount of full-time employees working at any one organisation.
How do you calculate FTE for biweekly payroll? ›To find the FTE for number of hours worked biweekly: take the number of hours worked biweekly and divide by 80 (total available hours) .
How do you calculate hours worked? ›- Determine the start and the end time. ...
- Convert the time to military time (24 hours) ...
- Transform the minutes in decimals. ...
- Subtract the start time from the end time. ...
- Subtract the unpaid time taken for breaks.
Full-Time Equivalent (FTE) is a tool to use when calculating the costs of a project or forecasting employee hours and salaries. FTE is a method of calculation to use when you want to accurately forecast specific needs of your business. It's common when budgeting or managing personnel resources for projects.
What is FTE to headcount ratio? ›What Is the Difference Between FTE and Headcount? Headcount refers to how many people your company employs. Calculating headcount is as simple as adding up your employees, while FTE refers to the number of full-time hours being worked at the company.
How do you calculate headcount efficiency? ›Divide the standard hours of labor by the amount of time worked, then multiply that figure by 100. The higher the final number is, the more effective the employees are.
How many hours per week is 0.7 FTE? ›Example 2: The full-time norm is 40 hours per week. An employee works 28 hours a week; it is considered as 70% FTE or 0.7 FTE.