For example, if your full-time employee is obligated to work only 30 hours a week, you should use that number in your calculations instead of 40, as in our case. 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. The calculator will tell how many full-time employees that represents and whether or not you are an Applicable Large Employer. However, the IRS mandates only 30 hours per week or 130 hours per month for an employee in the US to be considered full-time in terms of the type of employment.
HR departments often use FTE salaries to determine their part-time workers’ compensation. A part-time employee’s FTE salary is calculated by multiplying their FTE value by the salary allotted to an equivalent full-time employee. For instance, let’s say a full-time graphic designer working 40 hours per week makes $48,000 per year.
Full-time Equivalent (FTE) Calculator
The full time equivalent, often abbreviated as FTE is an indicator that reflects an employee’s productive capacity. An FTE of 1.0, for example, corresponds to the hours worked in a day for a full-time employee. Consequently, the FTE for a part-time employee working 20 hours a week would be 0.5. Additionally, FTE calculations give you a better sense of your current staffing levels so that you can plan and budget accordingly. Using time tracking software, like Homebase, will allow you to run a historical report based on employee work history and status to gather the average hours worked using custom fields. In addition, Homebase provides small business employers with a range of scheduling options to ensure your staff hours are within the correct range.
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. The total hours worked is the sum of the number of hours worked by part-time and full-time employees, whereas the number of available full-time hours in a year is most frequently 2,080. Now determine the number of hours worked by full-time employees over a given period. Full-time employees are those who work a minimum of 30 and a maximum of 40 hours a week and more than 120 days a year. Furthermore, this value is used only as a basis for calculating the annual FTE and reflects the hours of an employee who works 5 days a week, 8 hours a day. First, let’s look at what full-time equivalent or FTE actually means.
What is the purpose of FTE?
To determine this amount, ask yourself, what do you expect a full-time employee to work in terms of hours per week? The answer should be between hours a week per employee (when considering full time). Depending on how big a company is, the ERC is calculated differently. Companies with an average FTE below 100 receive tax relief based on all employee wages, while companies with an average FTE above 100 receive tax relief based on wages paid to employees who were not working. The Employee Retention Credit (ERC) is another measure designed to incentivize employers to keep hold of staff during the COVID-19 pandemic. It comes in the form of a tax credit worth half of employee wages over the course of a covered period.
We’ll assume that where you are, full-time employment means working 8 hours a day, 5 days a week, for 52 weeks a year. Benefits like paid time off and maternity/paternity leave are all included within the number of hours fte meaning worked, so don’t worry about accounting for these hours. 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.
What a full-time equivalent is and how to calculate it
The Fair Labor Standards Act (FLSA) doesn’t define what full-time or part-time employment is for any employer. To fulfill an employer’s shared responsibility to provide access to employee health coverage under the Affordable Care Act, a full-time employee provides at least 30 hours of service per week (or 130 hours per month). Based on the FTE value, some of your employees could be eligible for minimum or affordable healthcare insurance.
