How To Calculate FTE for Better Resource And Budget Management

In our hypothetical scenario, our company has the equivalent of 52.40 full-time employees. By adding the full-time and part-time hours worked, we can calculate the total number of hours fte meaning worked by all employees for the year as 109,000. In practice, FTE is measured by companies to estimate the number of full-time employees employed within a specific time frame.

But, in many situations, a business needs to view or report its staffing level in terms of full-time work. Once you’ve calculated your employee FTE, you can see how many part-time employees it takes to complete the same workload as a full-time employee. Horizons can support your business by helping you hire full-time employees anywhere in the world. Whether you are looking to expand your business internationally, outsource your operations, or take on more remote staff contact us today to discuss your needs.

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If you want to calculate FTE salary, multiply the FTE figure by your full-time salary. So if you pay FT workers $40/hr, this equates to $83,200 (roughly 2,080 hours scheduled annually—make sure to subtract leave balances). If you’re worried about salaries and benefits, you can use FTE calculations to learn what you’re currently paying those working full-time hours. Knowing your number of FTEs is important for assessing business performance, and it’s required under the Affordable Healthcare Act (ACA) and for certain tax credits.

Comparing the full-time equivalent to these other methods helps understand when one metric can be better. A statistical measure that counts the number of hours that a full-time employee works. Full-time equivalent students[9] is one of the key metrics for measuring enrollment in colleges and universities.

The Importance of Determining FTEs

Penalties and fines cut into your bottom line and interrupt your daily operations — and could leave a permanent stain on your company’s reputation. All ALEs are responsible for offering group health insurance unless they meet some specific terms and case-by-case scenarios. You’ll find FTE employment in several industries, like government, financial, nonprofit, and https://www.bookstime.com/ academic organizations. New, trends and analysis, as well as breaking news alerts, to help HR professionals do their jobs better each business day. Read our employer’s guide to find out more about different types of insurance you can offer your employees. Read our employer’s guide to find out more about how to hire employees in Europe, Asia, Africa, or elsewhere.