What is Full-Time Equivalent FTE & how to calculate it

independent contractors

Regardless of your company’s definition of full-time status, coverage under various employment laws is based on the definition provided in the law. For instance, under the Affordable Care Act , full-time means working, on average, at least 30 hours per week. By contrast, under the Families First Coronavirus Response Act , full-time employees are defined as those normally scheduled to work at least 40 hours each workweek.

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Marija Kojic is a productivity writer who’s always researching about various productivity techniques and time management tips in order to find the best ones to write about. She can often be found testing and writing about apps meant to enhance the workflow of freelancers, remote workers, and regular employees. Appeared in G2 Crowd Learning Hub, The Good Men Project, and Pick the Brain, among other places. So, 75 is the number of hours needed per day to finish the said 600-hour project. However, it will be up to you to decide how many people you’ll want to employ to carry this out and what type of employment you will offer them.

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No employee can be greater than 1.0 FTE, as overtime is not counted for this calculation. Simply enter the number of full-time employees, then add up all the hours worked by part-time employees , and don’t forget to enter the hours of your standard workweek . This way, you will be able to determine the number of full-time equivalent workers in your company even when you have part-time workers on-site. They also use it to calculate labor costs for the expected project workload and subsequently define the funds needed to finish a project. A full-time equivalent is a unit of measurement used to determine the amount of full-time hours worked by all employees in an organization. If a normal work week consists of 40 hours, an employee who works for 40 hours per week has an FTE of 1.0 while a part-time employee working only 20 hours per week has an FTE of 0.5. FTEs can help identify the number of full- and part-time workers an organization can hire, as well as the number of hours they should work.

After completing the project, you can remove them without any negative effects of the termination of an employee. To calculate your FTE when applying for a PPP loan, take the average number of hours worked by employees each week for the covered period, divide by 40, and round to the nearest tenth. For a PPP loan, a full-time employee is considered to work at least 40 hours per week, and no single employee can have an FTE exceeding 1.0.

Calculate annual hours worked

Make separate lists for full-time and non-full-fte meaning to simplify later calculations. Seeing a value of FTE 100% means a single full-time employee or multiple part-time employees work those full-time hours. For example, a pizza shop employs 5 workers who work the following average working hours excluding employees who are on leave, paid time off and sick leave. Full-Time Employees generally work more than 4 days or 30 hours a week and are permanently employed, as opposed to being temporary or seasonal. In many countries, a Full-Time Employee is also entitled to health-care benefits and vacation pay among other legal employment standards. 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. Your FTE employee is someone who works the entire workweek and his total working amount of hours are 2,800 hours per year, breaking down to 5 days a week, 8 hours per day.

  • It comes in the form of a tax credit worth half of employee wages over the course of a covered period.
  • This calculation provides a convenient way to quantify how many theoretically “whole” full-time employees are on the company payroll, even if the majority of your workforce is actually part time.
  • Identifying which employees are FTEs is essential for a number of reasons ranging from workforce planning to adhere to employment laws under the Affordable Care Act.
  • We’ll also show you how to perform various calculations that involve FTEs, and provide you with automatic calculators that will help make the process easier.
  • It indicates what a company could spend on a part-time employee if they worked full time.
  • To calculate the full-time equivalent for part-time employees, add up their work hours and divide that number by 120.

If an employee works 40 hours a week, they count as one full-time employee or 1.0 FTE. So if a business has 10 employees who each work 80 hours per month, they would have 800 part-time hours.

What is a full-time equivalent employee?

Depending on how big a company is, the ERC is calculated differently. Companies with an average FTE below 100 receive tax relief based on all employee wages, while companies with an average FTE above 100 receive tax relief based on wages paid to employees who were not working. The Employee Retention Credit is another measure designed to incentivize employers to keep hold of staff during the COVID-19 pandemic. It comes in the form of a tax credit worth half of employee wages over the course of a covered period. In a 0.75 FTE position, an employee will typically work 75 percent of the hours of a full-time employee.

independent contractors

It is crucial for each company to know their FTE to ensure they are complying with the law. However, that doesn’t always accurately depict the workload a company can carry. List of the company’s salaried employees working either full-time or part-time but exclude any independent contractors. The FTE definition refers to the number of hours of work of a full-time employee. Here are some common scenarios in which you wouldn’t have access to employer-sponsored insurance – and suggestions for how you can still get affordable, comprehensive health insurance.

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