The FTE calculation counts part-time employees as a fraction of a full-time employee, most often on the basis of the number of hours worked. Make a list or pull the accounting records for all of the employees that work fewer than 30 hours a week. Add the hours worked by part-time employees to the hours worked by full-timers to get the total hours. As mentioned previously, the FLSA doesn’t specify how many work hours qualifies for full-time employment. The IRS, however, does put a number on it to regulate ACA provisions including the ACA shared responsibility payment and some small business tax credits. Now add the total number of hours worked by full-time employees to that of part-time employees to get the total number of hours for all employees. First, let’s look at what full-time equivalent or FTE actually means.

• An employee with a regular budgeted assignment of 75% of a full-time job position has a 0.75 FTE.
• A single full-time employee is the baseline of the measurement and has an FTE of 1.0, while a part-time employee working half as many hours has an FTE of 0.5.
• Do you want help with the management of your company’s key figures, helping your team make the right decisions, and implementing the right measures in personnel planning?
• Once all employee hours are accounted for, you can complete this step by adding all the hours worked for the week.
• The full-time equivalent is an indicator that answers many of the questions Human Resources departments need answers to.
• Project Resource Planning Plan and allocate resources for timely delivery.
• In other cases, you’ll need multiple employees to fill the quota—two part-timers, four employees that only work 10 hours a week, etc.

One FTE equals 2,080 hours per year and the total number of employees is taken into account rather than the number of hours they have worked. Certain employees are not included in the calculation such as owners, partners, shareholders, family members or relatives, and seasonal workers who work fewer than 120 hours per year. Whether an employer is an ALE under the shared responsibility provisions will depend on the size of the organization. Those employing an average of at least 50 full-time employees including full-time equivalent employees are considered to be an ALE. A full-time equivalent employee refers to a combination of part-time employees that add up to one or more full-time employees. For example, if two part-time employees each work four hours per day for 10ten days apiece during a weekly pay period, their 40-hour combined total represents 1.0one FTE on the company’s payroll for that pay period. The Affordable Care Act requires every employer with 50 or more full-time employees working at least 30 hours per week to offer health insurance to its employees.

What is FTE?

fte meaning can serve as a parameter for your decision-making as a manager regarding promotions, dismissals, division of tasks, training and talent development. Through this, you can identify the needs and internal capabilities of your employees more easily, as well as exercise more strategic management.

This gives you the total number of hours worked by all of your employees. The comprehensive healthcare reform law was enacted in March 2010.

What is a full-time equivalent employee?

However, if you pay your interns, you will need to include them in your calculations. If a company bills clients, or pays out overtime, identifying teammates’ full-time equivalency helps identify and track organizational costs.