After all, the net costs of hiring additional part-time employees may, in fact, be lower than the more visible cost of overtime pay for existing staff, and FTE is used to uncover such findings. The annual hours for your part-time employees (C, D, and E) add up to 3,120 (1,560 + 1,040 + 520). The annual hours for your full-time employees (A and B) add up to 4,160 (2,080 x 2).
- Under the ACA, certain small businesses are eligible for a small-business tax creditto help with the costs of offering health benefits to employees.
- The calculation is straightforward — enter the number of full-time employees together with the total number of hours worked by part-time employees per week.
- To determine whether a company is an Applicable Large Employer (ALE), the ACA says that a company must have an average of 50 or more FTE employees over the course of one year.
- For over a decade, Jennifer worked as an HR generalist, providing expertise in accounting, payroll, and HR by implementing payroll and benefits best practices and creating onboarding and employee-relations documentation.
Additionally, you can use FTE to determine pay for part-time workers by simply multiplying a part-time employee’s FTE by the full-time salary for that same position. For example, if a full-time program coordinator makes $60,000 per year for 40 hours a week, a part-time employee working 25 hours per week in the same position (0.625 FTE) would make $37,500 per year. (For a year, that is 2,080 hours with 40-hour workweeks and 1,560 hours with 30-hour workweeks, which is considered full-time for ACA reporting). A full-time equivalent employee is a worker with an FTE of 1.0, which will usually mean they’re employed full-time at your company. A full-time employee is considered to work at least 30 hours per week on average. Some labor laws and employee benefit programs are linked to how many employees a company has on its payroll.
Make a List of All Employees & Hours Worked
To delve further into the matter, let’s look at how FTEs are calculated. If you’re ever asked to calculate FTEs for your company, the person or organization asking you for the figure should be able to outline exactly how they expect you to arrive at your result. Generally speaking, you can arrive at your own FTE by following the steps below. Knowing your FTE number is also helpful for determining if your organization is eligible for certain benefits programs, such as the Small Business Health Options Program (SHOP).
Those five workers are in fact equivalent to 3.37 full-time workers. Essentially, the FTE is the number of determined full-time positions in an organisation. It is used to count employees depending on their degree of employment. First, it is necessary to determine the number of hours worked by part-time employees (i.e. part time FTE).
What is the full-time equivalent (FTE)?
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