Full-time Equivalent FTE Calculator

FTE has several different uses and several different calculation methods, depending on why you want to calculate it. It will help you plan your project work, set deadlines, https://www.bookstime.com/articles/accounting-automation and work out your budget. If you are such an employer, then you are eligible to apply for a tax credit in the amount of 50% of employer-paid health care premiums.

When benchmarking FTE levels, it is important to compare against organizations of similar size within the same industry to gain the most relevant insights. For example, a small startup would not benchmark against a large multinational corporation. Now that we’ve got that out of the way let’s look at how to calculate FTE. Bear in mind that this is just the expected number of hours Olivia may work with a 0.7 FTE — she will likely use some of these hours for PTO.

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After almost a decade of experience in public accounting, he created MyAccountingCourse.com to help people learn accounting & finance, pass the CPA exam, and start their career. For example, you may want to do this when you want to make an FTE offer to a new employee during a job interview. And the actual number of hours attached to an FTE will also depend on your organization’s policy. An FTE calculation for all employees in a company needs to be rounded down to the nearest whole number (usually, 1.0 FTE or greater).

For example, insurance provider HCF posts a 32.1 per cent pay gap in base salary and 29 per cent in total remuneration. The base gender pay gap across financial and insurance services is 23.6 per cent, while the total gap is 26.1 per cent, the WGEA data shows. The WGEA also provides industry specific pay gaps, so employees and employers can see how their firm sits within the broader sector. Divided by the standard 40-hour work week, this would equal 2.5 FTEs — so you know that you will need two full-time workers and one part-time worker or another combination of workers that adds up to 2.5 FTEs. In its most basic form, FTE is calculated by dividing the total number of hours worked by full-time employees by the number of hours worked by all employees. You can use your business’s definitions for full-time and part-time employees.

Why is FTE important for PTO?

An FTE salary is an employee salary converted into a full-time equivalent salary within a full year, regardless of whether the said employee holds a full-time or part-time position. The actual workload is not taken into consideration for this calculation. Whether an FTE of 0.75 is considered full-time will depend on the company policy made by the employer.

• Understanding these drawbacks is essential to ensure balanced and comprehensive human capital management.
• In general terms, full-time equivalent (or FTE) is a unit of measure that plays an important role in calculations used in businesses, project management, or federal programs for eligibility purposes.
• Families are also likely to make decisions about who can take on more of the unpaid household responsibilities based on who has the highest earning capacity – as the numbers show, often that remains to be men.
• 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.
• This determines how much money a company should allocate to pay the researcher.

Knowing how to accurately calculate and strategically apply FTE analysis helps optimize staffing, forecast budgets, align talent strategy to business goals, and support employee retention. Many HRIS softwares can automate FTE calculations by incorporating data on employee hours worked, absences, time-off calendars, and more. In our hypothetical scenario, our company has the equivalent of 52.40 full-time employees. Full Time Equivalent (FTE) refers to the unit of measurement equivalent to an individual – worker or student – one unit of a work or school day, applicable in a variety of contexts. In most cases, full time equivalents measure an employee or student and/or their workload.

How To Calculate FTE for Better Resource (And Budget) Management

Before we delve into how to calculate it, there are a few important points to note. To determine your eligibility for the small-business tax credit, you’ll need to use a different system for counting FTEs. First, count the total number of employees who worked at your company at any time during the year, both full-time and part-time. To help you determine if you are eligible for a small-employer healthcare tax credit, you need to count the number of employees employed in your company throughout the year. As evident, once you have the total number of hours per day, you’ll be able to pick whatever days/employees ratio you want to carry out the estimated workload.

It makes planning for projects and upcoming seasonal changes easier when you know how much capacity your team has. With Float, you can check the total leave balance for FTE or PTE employees using the time off policies feature. You can view the unused fte meaning balance as a whole number or percentage for on-the-fly planning. With FTE, you can get a clearer picture of how your employees are performing in their jobs. Desktime is a desktop time tracking and productivity app that makes it easy to monitor FTEs.