Knowing your number of FTEs is important for assessing business performance, and it’s required under the Affordable Healthcare Act (ACA) and for certain tax credits. The method for calculating FTE is slightly different for each of these uses. What’s more, measuring your FTE is an excellent help in project planning as it helps estimate how many hours of fte meaning work go into a project. Based on it, project managers can decide whether they want to hire full-time or part-time help and how many of each would be the most cost-effective. FTE is used to determine staffing needs for projects by comparing the time that a person would work if they were working full-time to the number of hours they will actually work.

Within this method, you add up all actual hours worked (including PTO). If you are such an employer, then you are eligible to apply for a tax credit in the amount of 50% of employer-paid health care premiums. To calculate the number of hours your employee is expected to work based on their FTE, you’ll need to reverse the previously mentioned process of calculating FTE based on the number of hours worked.

FTEs calculator for project managers

It’s unlikely that you only employ full-time employees in your company — you likely receive help from part-time employees or temporary workers. The full-time equivalency measurement lets you calculate the hours those employees work compared to a full-time workload. In this example, your company has the equivalent of 5.24 full-time employees, or a 5.24 FTE. By this measurement, your four part-time workers amount to just less than one and one-quarter of a full-time equivalent employee.

So the FTE is not the number of employees in a company, but the equivalent of a full-time employee. Because the number of employees says nothing about a company’s actual work performance. Add the total hours worked by part-time and full-time employees.

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Based on the skill assessment, you go through your resource inventory to assign work to employees that have the right skills needed for the project. In case you don’t have the skills you need for the project in-house, you hire more people. Once you’ve a time estimate of the project work, you can also use it to calculate the cost of resources for project execution. In this case, knowing your headcount and comparing it to other metrics (like sales volume) will help you figure out where there may be inefficiencies within your organization and make decisions accordingly. To qualify for PPP loan forgiveness an organization must have maintained the same level of FTE employees during certain specified time periods following the loan disbursement. Calculating FTEs will also determine an employer’s duties under the shared responsibility provisions of the Affordable Care Act.

The ACA makes health coverage a shared responsibility of individuals, employers, and the government to ensure that as many people as possible have affordable health insurance. While the law doesn’t require all business organizations to offer health insurance to their workers, employers who have 50 or more FTEs and are therefore considered ALEs must comply with the employer mandate. Thankfully, a business owner can easily confirm their ALE status. If you’re an employer who wants to understand if the Affordable Care Act’s (ACA) employer mandate applies to you, it’s important to calculate your number of full-time equivalent employees (FTEs). Generally, full-time employees have more and better benefits than part-time workers and contractors.

EN_How To Easily Calculate the FTE of Your Company

If a normal work week consists of 40 hours, an employee who works for 40 hours per week has an FTE of 1.0 while a part-time employee working only 20 hours per week has an FTE of 0.5. 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. If your business considers 40 hours to be a full-time workweek, then an employee working 40 hours per week would have an FTE of 1.0.

A part-time worker who works half-time would be equivalent to 0.5 FTE. The full-time equivalent model is great for organizations hiring resources based on the projects they take. 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.

How to calculate FTEs to determine ALE status

When classifying FTEs and working hours in your company’s policy, you can follow suit, or define your own FTE measurements. For example, you may want to do this when you want to make an FTE offer to a new employee during a job interview. And the actual number of hours attached to an FTE will also depend on your organization’s policy. Whether an FTE of 0.75 is considered full-time will depend on the company policy made by the employer. If 0.75 FTE is considered full-time in a company, such employees may qualify to apply for the Public Service Loan Forgiveness (PSLF) program, as stated above.

However, a full-time employee is not the same as a full-time equivalent. The number of full-time equivalent employees at an organization is made up by a combination of full-time and part-time employees. According to the ACA, part-time hours are considered anything less than 30 hours per week. FTE or Full-Time Equivalent is an HR metric that quantifies an employer’s number of full-time employees regardless of how many hours each employee works. It was created to measure part-time employment in terms of full-time hours.