If 0.75 FTE is considered full-time in a company, such employees may qualify to apply for the Public Service Loan Forgiveness (PSLF) program, as stated above. With the required inputs in place, we can arrive at approximately 52.40 FTEs by dividing the total hours worked by all employees by the total number of available work hours in a year. Suppose a company currently has 50 full-time employees on its payroll, along with 10 part-time employees. In summary, understanding the meaning of FTEs is a key competency for HR professionals today.

• A portion of this loan can be forgiven based on the number of FTE workers an employer has on its payroll.
• Knowing this will help you stay compliant with state and federal laws.
• When using FTE alongside other performance metrics, it can be easier to understand per-employee costs and output in a large organization.
• It will help you plan your project work, track project development, set deadlines, and work out your budget.
• In most cases, full time equivalents measure an employee or student and/or their workload.
• An employer with a 35-hour workweek would simply divide the employee’s scheduled hours by 35 to determine the FTE.
• To fulfill an employer’s shared responsibility to provide access to employee health coverage under the Affordable Care Act, a full-time employee provides at least 30 hours of service per week (or 130 hours per month).

A full-time equivalent (FTE) — also known as a whole-time equivalent or WTE — represents the sum of all full-time hours employees work in a certain company. Along with counting the hours worked, FTEs show how many full-time employees a particular company employs over the course of a fiscal year or needs to employ to carry out a project. For instance, in terms of business, calculating FTEs may be of great use when determining how many hours part-time employees should work to equal the number of hours full-time employees work. Such calculations facilitate accounting processes such as estimating wages, payroll, costs, etc.

Step 3: Sum Up All the Work Hours

Full-time equivalents (FTEs) is a metric that measures the total number of full-time employees you have based on hours worked rather than the exact number of employees. Each part-time employee counts as a fraction of one FTE based on how many hours they work on average. Full-time equivalent, or FTE, measures the total amount of full-time employees working at any one organisation. It is a way of adding up the hours of full-time, part-time and various other types of employees into measurable ‘full-time’ units.

You can use our free FTE template to easily work out your company’s full time equivalent. These indexes are crucial for strategic Human Resources management as they highlight the productivity of a company. In other words, they allow you to calculate the performance of a team, department or entire organisation. fte meaning Using the full time equivalent calculation, it’s possible to identify crucial organisational needs, like whether your company needs to restructure, hire or reduce staff. The FTE is therefore an HR indicator that’s integral to the success of the department and the organisation as a whole.

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Next, divide the above number by the ideal number of work hours for a full-time employee per month. The IFTE of 4 employees equals 160 work hours (assuming a regular work week has 40 hours). FTE or full-time equivalent is a tool to help you gauge the potential productivity of your business or company. Regardless of the type of business you’re in, it’s important to keep an updated number of your employees and the hours they dedicate to their work duties.

• HR can analyze FTE ratios to ensure the workforce alignment supports desired cultural goals.
• However, determining the FTE for Jimmy and Marta requires calculation.
• The actual workload is not taken into consideration for this calculation.
• 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.
• The number of full-time equivalent employees is used to determine the amount of loan forgiveness for borrowers.
• Based on an FTE of 1.0, we calculate employees work 2,080 hours per year.

Once you have a total number of hours, divide by 2,080 and round down for your FTE. For example, an FTE calculation of 1.0 corresponds to the hours worked in a day for a full-time employee. Therefore, the FTE for a part-time employee working 20 hours a week would be 0.5.