How Do I Calculate Full-Time Equivalent (FTE) Hours?

Calculate Full-Time Equivalent (FTE) hours by dividing an employee’s scheduled hours by the employer’s full-time week hours. FTE calculations help businesses benchmark income per employee and convert part-time hours into full-time equivalents.

By Brad Nakase, Attorney

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Table of Contents
1. Introduction
2. Understanding Full-Time Equivalent (FTE) Calculation
3. Practical Examples of FTE Computation

Introduction

The scheduled hours of an employee divided by the number of hours of the employer during a full-time week is the full-time equivalent, or FTE, computation. When a company implements the forty-hour workweek, workers who are slated for 40 hours a week are considered 1.0 full-time equivalents. 0.5 FTEs are workers with a 20-hour workweek plan.

Understanding Full-Time Equivalent (FTE) Calculation

To calculate the FTE for an employee with a 35-hour workweek, an employer would only divide the scheduled hours by 35. For instance, when the full-time week consists of 35 hours, an employee who is expected to work 21 hours a week would make up 0.6 FTE.

Practical Examples of FTE Computation

Hours worked, not employee count, are the basis for FTE computations. One FTE could work alongside four employees. 1.0 FTE would be four 0.25 employees. One FTE, or 40 hours performed according to a workweek of 40 could be achieved by Amir, Mark, Sue, and Phyllis if they each worked 10 hours a week.

To benchmark income or earnings per employee, for example, employers may utilize the FTE calculation. For the purpose of computing these indicators, it can be useful to convert the hours performed by part-time staff members into equal full-time hours.

Counting FTEs is required by some regulations, such as the Affordable Care Act (ACA), which defines exactly how an FTE is computed and how a company must apply the regulations to its business.

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