Turn off more accessible mode. Contact Us. Loading content, please wait Edit The Navigation. Page Content. Follow the ATA Facebook. For example, if an organization considers 40 hours per week as full-time and there are four employees who work 10 hours each per week, the hours for those four employees add up together to make 1. This standardization is very useful in employment classifications and other areas.
For example, business analysts and project managers use FTE to evaluate workload and labor costs. Once they have an estimate of the full-time employees needed to accomplish necessary tasks, they can calculate salaries. This information allows them to forecast a budget for the upcoming year or for a specific project. Human resources HR departments use FTE to standardize the working hours and salaries of part-time employees. For example, half-time workers are 0.
FTE is also useful for headcount analysis. Budget analysts can easily compare headcounts to outputs or profits using FTE. Management and HR can evaluate projects, job descriptions or really any employment need and assess the number of FTE needed to get the job done. Prepare a list of all the employees paid with a year-end W-2 form.
Exclude independent contractors. Deduct approved leave hours, such as paid time off and sick leave. Companies usually define their full-time schedule by the maximum hours authorized, which is 40 hours per week. In this case, any employee working less than 40 hours per week would be considered to be a part-time employee. If a company defines a full-time position as being 30 hours, then any schedule under 30 weekly hours is considered to be part-time.
To determine the part-time FTE, divide the hours worked by part-time employees by the hours worked by full-time employees. To calculate the FTE value for a specific position, simply divide the number of hours worked by the number of hours considered to be full-time.
If you use 40 hours as full time, someone who works 35 hours has a 0. Someone who works 30 hours has a 0. To better understand FTE meaning and to understand how it works, here is a sample calculation. A company has a headcount of four.
Two employees work 40 hours a week. One employee works 30 hours a week. See How do we calculate the average hours worked to determine the number of full-time equivalents under the Affordable Care Act? You may be trying to access this site from a secured browser on the server.
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