You can also calculate a full-time equivalent for both hours and salary. The following example will help you understand the concept of FTE in terms of total hours worked for all employees and the time they worked. Then, the total hours that both full and part-time employees worked is divided by the full-time equivalent hours per employee. The FTE is a unit of measure for an employee or a student’s workload. The hours worked per day, week, or month are compared to what these same units are for full-time employment, and the subsequent calculations reflect them.

Our writing and editorial fte meaning are a team of experts holding advanced financial designations and have written for most major financial media publications. Our work has been directly cited by organizations including MarketWatch, Bloomberg, Axios, TechCrunch, Forbes, NerdWallet, GreenBiz, Reuters, and many others. We add the full-time FTE, which as per point 2 is calculated to two, with the part-time FTE. It helps to determine the size of the company and the extent of involvement of every employee in the business.

Keeping FTE ACA-Compliant: What You Need To Know

Use our employment calculator to get an estimate of your overall costs for employees in different countries. The 40-hour workweek calculation is applicable if you are doing the math for accounting and business purposes. Let’s say you have two hires working 40 hours per week, three part-timers each working 20 hours per week, and two people with flexible schedules working an average of 15 hours per week. The comprehensive healthcare reform law was enacted in March 2010.

We strive to empower readers with the most factual and reliable climate finance information possible to help them make informed decisions. Our goal is to deliver the most understandable and comprehensive explanations of climate and finance topics. Software, for free, and you will test all the benefits of our tool. I accept the treatment of my data to receive related communication about the service. Get instant access to video lessons taught by experienced investment bankers. Learn financial statement modeling, DCF, M&A, LBO, Comps and Excel shortcuts. The FTE is the principle R&D personnel measure that allows comparison on an international level.

What Is the Difference Between FTE and Headcount?

When classifying FTEs and working hours in your company’s policy, you can follow suit, or define your own FTE measurements. An employee with a regular budgeted assignment of 75% of a full-time job position has a 0.75 FTE. 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). FTE refers to one full-time employee or the equivalent of a full-time employee.

For example, you can choose to include only paid hours, or you can include both paid and unpaid hours . This is because the purpose of an FTE is not to see how many employees you have, but rather to measure the amount of work that’s being done. In other words, it allows you to compare different types of staffing arrangements on a level playing field. Join BambooHR and League to explore how to go beyond wellness resolutions so your organization can reap all the benefits of a healthy workforce. For example, comparing the two groups over time allows an organization to find opportunities to improve efficiency when hiring seasonally or when making part-time and full-time staffing decisions. For example, at the University of Utah Health, eligible hospital and clinics staff members who work the equivalence of 0.50 to 0.74 FTE of a full-time schedule will accrue at 50% of the full-time benefit rate .

What Does FTE Stand for?

Horizons can support your business by helping you hire full-time employees anywhere in the world. Whether you are looking to expand your business internationally, outsource your operations, or take on more remote staff contact us today to discuss your needs. A full-time employee who works 40 hours per week is equal to one FTE, and a part-time employee working 20 hours per week is equal to 0.5 FTE. Daniel, Nicole and Bobby do not work a full 40 hours a week, and to calculate the Full-Time Equivalent of the hours they work, you must divide each employee’s working hours by the company’s hours for a full-time workweek. Do you want to calculate how much hiring an employee abroad will actually cost you?

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. Based on an FTE of 1.0, we calculate employees work 2,080 hours per year. 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. 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. FTE, an abbreviation for “full time equivalent”, represents a unit of measurement standardized to equal the number of hours worked by the typical full-time employee. A full-time equivalent in government employment, as defined by section 85 established by the U.S. President’s Office of Management and Budget , is calculated as the total number of straight-time hours, excluding overtime and holiday, divided by total compensable hours for the year.

Separate hours of part-time employees

This means that all company employees (both full-time and part-time) spent 200 working hours together. That means that before calculating a company’s FTE, a manager shall consider, first of all, company and country distinctions and regulations. And this also means that 1 FTE may equal a different number of working hours in different countries or even companies. Let’s say, in the 19th century people used to work much more than now, at least hours per week . To find the equivalent of a full-time day, divide the total number of hours by 8. 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.