FTE Calculator (Full-Time Equivalent)

Understanding Full-Time Equivalent (FTE)

FTE is a unit that measures the total number of full-time employees based on combined work hours. It helps organizations standardize employee counts regardless of part-time or full-time status.

FTE Calculation Formula

FTE = Total Hours Worked by All Employees ÷ Full-Time Hours Per Week

For example: 3 employees working 40, 20, and 30 hours = (40 + 20 + 30) ÷ 40 = 2.25 FTE

Why FTE Matters

• Budgeting: Calculate staffing costs accurately
• Productivity: Measure output per FTE
• Compliance: Meet regulatory requirements (e.g., ACA, FMLA)
• Planning: Forecast workforce needs
• Comparisons: Benchmark against industry standards

Common FTE Standards

• United States: 40 hours/week (2,080 hours/year)
• European Union: Typically 35-40 hours/week
• Healthcare: Often uses 36-37.5 hours/week for nurses
• Government: Usually 40 hours/week

FTE in Affordable Care Act (ACA)

Under the ACA, employers with 50+ FTE employees must offer health insurance:

• Full-time = 30+ hours per week or 130 hours per month
• Part-time hours are aggregated to calculate FTE
• Seasonal workers may be excluded from count

Using FTE for Decision Making

• Determine if you need to hire more full-time or part-time staff
• Calculate cost per FTE for budget planning
• Assess productivity metrics (revenue per FTE, tickets per FTE)
• Plan for benefits eligibility thresholds
• Ensure compliance with labor laws

FTE vs. Headcount

• Headcount: Total number of employees (5 employees = 5 headcount)
• FTE: Equivalent full-time workers (5 part-timers might = 2.5 FTE)

Note: FTE calculations may vary by industry, region, and specific regulations. Always verify requirements with your HR department or legal counsel.