For example, a business might state, “Our standard work hours are Monday to Friday from 8 a.m. – 5 p.m.” If employees take a one-hour lunch, then the available hours per workweek is 40 hours . In the chart below, because both Carole and Lynn are full-time employees, they would each be counted as one FTE. However, determining the FTE for Jimmy and Marta requires calculation.

• If 0.75 FTE is considered full-time in a company, such employees may qualify to apply for the Public Service Loan Forgiveness program, as stated above.
• But, in many situations, a business needs to view or report its staffing level in terms of full-time work.
• Whether an employer is an ALE under the shared responsibility provisions will depend on the size of the organization.
• Imagine that, with the same FTE, an employee can deliver 100 units, while another only delivers 30.
• In this respect, all information provided is without guarantee of correctness, completeness and up-to-dateness.
• ​​FTE is the full-time equivalent hours that all the employees in your business represent.

First, you need to account for the hours of a full-time weekly schedule and the actual employee hours they would be scheduled to work. If it’s a 40 hour week, each employee that works 40 hours per week is equal to 1.0 FTE. The FTE is only a measurement unit to calculate how many hours your employees worked on an actual-hours, days-worked, or weeks-worked basis.

Example FTE Calculations

For full-time employees — Each employee who worked 40 or more hours per week on average, during a specific calculation period counts as 1.0 FTE. No employee can be greater than 1.0 FTE, as overtime is not counted for this calculation. In general terms, full-time equivalent is a unit of measure that plays an important role in calculations used in businesses, project management, or federal programs for eligibility purposes. All the above-mentioned factors end up costing the company something and affecting its bottom line.

• The amount of benefits depends on the FTE value, as some employers offer half the benefits of full-time employees to part-timers working between 0.5 and 0.75 FTE.
• FTE salary is most often used by companies rather than individuals.
• To process payments for employees and contractors, employers need to calculate how to make payments hourly, daily, weekly, or monthly.
• Multiply the total hours worked in a week by 52, the number of weeks in a year, to find the number of hours worked annually.
• Whereas, employees that works 20 hours per week are considered 0.5 FTEs.
• To identify the FTE of part-time employees, divide the total hours worked by part-time employees by the annual hours worked by one full-time employee (i.e., 2,080 hours).

fte meaning for the Small Business Tax Credit Program — Applies to small businesses whose revenues have decreased or who have been shut down between the period of March 12, 2020, and December 31, 2020. If eligible, employers may receive a tax credit of up to 50% of the wages paid. For the year 2021, the maximum benefit equals $28,000 for the entire year. 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. In most cases, full time equivalents measure an employee or student and/or their workload.

How to calculate FTE for all employees with examples

These calculations are used to clarify the company’s obligations regarding employee health benefits. Since both are considered to be full-time schedules in their respective companies, both count as a 100% or 1.0 FTE. According to OECD statistics on average weekly hours worked on the main job from 2021, Denmark has an average of 33.7 hours per week compared to Columbia and its average of 47.8 hours during a workweek. The US falls somewhere in the middle when compared to other countries, with 38.8 hours of work time per week, on average.

It is crucial to note that the definition of full-time employment varies by company and industry, therefore 100% FTE may not always mean the same thing across organizations. Reduced cost – With FTE, you can ensure that you are assigning the right amount of resources and not wasting time and money on over-hiring. In this blog, we will show you what FTE is and explain how it is calculated, also how to calculate FTE for a business that is only open for a few months of the year.