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. However, if your company employs part-time employees as well, several of them together may equal 1.0 FTE. To calculate the FTE for all employees in your company, consider the full-time and part-time employees you employ. The actual PTO an employee can accrue may depend on several factors, including years of employment that dictate an employee’s hourly PTO accrual rate. These rates will depend on the PTO accrual rate policies of a company, organization, or institution.

Marija Kojic is a productivity writer who's always researching about various productivity techniques and time management tips in order to find the best ones to write about. She can often be found testing and writing about apps meant to enhance the workflow of freelancers, remote workers, and regular employees. Appeared in G2 Crowd Learning Hub, The Good Men Project, and Pick the Brain, among other places. Within this method, you add up all actual hours worked (including PTO). For example, you may want to do this when you want to make an FTE offer to a new employee during a job interview.

What Is the Purpose of Calculating FTE?

This way, you will be able to determine the number of full-time equivalent workers in your company even when you have part-time workers on-site. Full-time equivalent, or FTE, is a calculation human resource managers use to determine how many full-time employees they have on staff. To get this figure, they add the hours paid to all employees (full-time, part-time, etc.) and divide that by the number of hours a full-time employee would work over a given period.

• It’s a foundational step, ensuring new team members start on the right foot and understand what is expected of them.
• It comes in the form of a tax credit worth half of employee wages over the course of a covered period.
• When classifying FTEs and working hours in your company’s policy, you can follow suit, or define your own FTE measurements.
• The actual PTO an employee can accrue may depend on several factors, including years of employment that dictate an employee’s hourly PTO accrual rate.
• With 14 employees, 7 of which are full-time and 7 part-time, the staffing capacity is 9.04 full-time employees per year.
• Effective training materials should be engaging, informative and tailored to the participant’s needs.

By this measurement, your four part-time workers amount to just less than one and one-quarter of a full-time equivalent employee. This is where the concept of the full-time equivalent (FTE) employee comes in. This is done by counting somebody who works half as much as a full-time employee as half an employee, and so on. It might sound cold, but it’s a https://www.bookstime.com/articles/what-is-encumbrance-accounting vital metric when companies are applying for government loans, and when determining whether the company is large enough to have to follow certain laws. Moreover, having accurate FTEs for all employees will also help employers determine responsibilities towards them, their PTO rates, and whether the business is eligible for certain federal programs.

What Is a Full-Time Equivalent (FTE)?

On the flip side, a spike in FTE levels without corresponding business growth may indicate a need to realign staffing plans and reduce hours. Cassie is a deputy editor, collaborating with teams around the fte meaning world while living in the beautiful hills of Kentucky. She is passionate about economic development and is on the board of two non-profit organizations seeking to revitalize her former railroad town.

• This, therefore allows them to make better decisions regarding personnel management.
• Figuring out exactly how many people work for a company is more complicated than asking for a show of hands.
• A full-time equivalent (FTE) is a unit of measurement used to figure out the number of full-time hours worked by all employees in a business.
• Float does the heavy lifting by calculating your resources based on their total available hours (for both FT and PT capacity).
• To see your employees’ FTEs, you can view their daily/weekly/monthly assignments in Clockify.
• For example, if an employee has an FTE of 0.80, multiplying that number by 40 means that an employee works 32 hours a week.

It represents a single full-time employee or multiple part-time employees whose hours add up to one full-time employee’s hours. For example, comparing the two groups over time allows an organization to find opportunities to improve efficiency when hiring seasonally or when making part-time and full-time staffing decisions. 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 FTE employee doesn’t have to actually exist, and can be a combination of part-time employees. For example, if your entire staff works part-time, the FTE employee is a hypothetical full-time worker by which your part-time workers are measured.