The full-time employees work 40 hours per week and 52 weeks out of the year, meaning that the number of full-time hours worked on an annualized basis is 104,000 hours. Suppose a company currently has 50 full-time employees on its payroll, along with 10 part-time employees. The formula for calculating the full time equivalent (FTE) on an annual basis is as follows.
Divide the Total Hours Worked by All Employees by the Number of Available Full-Time Hours in a Year (2,080 Hours).Add the Number of Hours Worked by Both Part-Time and Full-Time Employees.Count the Number of Hours Worked by Full-Time Employees.Count the Number of Hours Worked by Part-Time Employees.The baseline in order to qualify as 1.0 unit of a full-time employee is set at 40 hours, so a part-time employee that worked 20 hours would be marked as a 0.5 FTE.Ĭalculating the full time equivalent (FTE) is a four-step process: The FTE calculation counts part-time employees as a fraction of a full-time employee, most often on the basis of the number of hours worked.
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How to Calculate Full Time Equivalent (FTE)?įTE, an abbreviation for “full time equivalent”, counts the approximate number of full-time employees employed by a specific company, but with the inclusion of part-time employees.Įmployers can use FTE to evaluate their hiring capacity and current payroll, as well as for reporting purposes related to labor laws and employee benefit programs.
In practice, FTE is measured by companies to estimate the number of full-time employees employed within a specific time frame. The Full Time Equivalent (FTE) represents a unit of measurement standardized to equal the number of hours worked by the typical full-time employee.
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