What is FTE and How is it Calculated?
Full-time equivalent (FTE) is a company’s full-time workforce based on part-time hours. So how will FTE benefit you?
Your company benefits from the FTE calculation since it determines the number of full-time employees, even if they are part-time or contract workers. Firms must grasp this since it affects staffing, budgeting, and labor law compliance.
This blog will explain FTE and how to calculate it for a seasonal firm.
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The Meaning of FTE?
FTE means Full-Time Equivalent.
It measures a worker’s weekly hours.
FTEs are the hours a full-time worker works for a company. Instead of counting employees, count hours worked.
This measuring unit was created to quantify how many full-time employees equal working hours in a company with both full-time and part-time workers.
This financial phrase measures the productivity of all employees, full-time or part-time. This figure helps companies track worker workloads and manage recruiting and investment.
It acts as a regulatory checkpoint and control mechanism, linking firm statistics to studies on how to interpret them for compliance or program profit.
How to Calculate FTE?
Full-time workers work 40 hours every week. Full-time 52-week workers work 2,080 hours. Add your employees’ annual working hours and divide by 2,080 to compute FTE.
Imagine having 17 employees that work 20,800 hours per year. Ten full-time equivalents. The same technique can generate FTEs for a month, quarter, or day.
Due to sick leave, vacations, holidays, and time off, not all full-time workers work 40 hours a week for 52 weeks. Consider this when computing EFTs.
Step 1: List your employees and their hours.
Make a board, chart, table, or graph. Whatever relaxes you!
Step 2: Check their schedules.
Full- or part-time.
Step 3: Determine hours needed.
Calculate annual or weekly hours worked. Totally depends on your needs.
To determine annual hours, multiply 52 by the number of weeks.
Step 4: Calculate part-time FTE easily.
Divide the total part-time hours by the total full-time hours. Because total full-time working hours determine FTE.
Step 5: Total FTEs.
Include full-time employees in your part-time FTE calculation.
All done! You have total FTE.
No worries if you need a simpler FTE calculation example.
We will educate FTE using simple numbers and examples!
A simple FTE calculation:
Say you work 40 hours a week full-time.
If someone works 40 hours a week,
One works 35 hours/week,
one works 20 hours,
another for 10 hours.
Add those and divide by full-time working hours to compute FTE.
40+35+20+10=105 weekly work hours
105/40= 2,625 FTE
Thus, it equals 2,625 full-time workers.
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