Try to include employee leave (both paid and unpaid) in the overall number of work hours to make your results more accurate. The annual hours for your part-time employees (C, D, and E) add up to 3,120 (1,560 + 1,040 + 520). The annual hours for your full-time employees (A and B) add up to 4,160 (2,080 x 2). To calculate FTEs and see if you qualify for tax credit, you can choose one of the said methods https://www.bookstime.com/articles/bookkeeping-for-ebay-sellers (we’ve provided calculators for each). If you, for instance, choose the first method, enter all the actual hours worked (including PTO) and divide that number with 2,080 to get the final FTE. According to OECD statistics on average weekly hours worked on the main job from 2021, Denmark has an average of 33.7 hours per week compared to Columbia and its average of 47.8 hours during a workweek.

If you’re trying to determine who is full time and part time for ACA purposes, use 30 hours per week as the criteria for a full-time employee. If you’re calculating FTE for a different purpose and consider 40 hours to be full time in your organization, you can use that as your criteria. For the purposes of calculating FTE, most employers consider a fte meaning full-time employee one who works between hours a week. Although the DOL doesn’t define what a full-time employee is (it leaves that definition up to the employer), the IRS does, so make sure that as work roles change, you keep up-to-date records of your FTE employees. For example, let’s say you have a 100-hour project to complete within a week.

Planning New Projects Is Easier

As artificial intelligence technology continues to develop, the demand for workers with the ability to work alongside and manage AI systems will increase. This means that workers who are not able to adapt and learn these new skills will be left behind in the job market. You’ll find the answers to all these questions and more and learn how to calculate FTE step-by-step. Bear in mind that this is just the expected number of hours Olivia may work with a 0.7 FTE — she will likely use some of these hours for PTO. Trends in this ratio can show which teams are operating efficiently and which may be over or understaffed relative to output.

The US falls somewhere in the middle when compared to other countries, with 38.8 hours of work time per week, on average. HR must track FTEs correctly to remain compliant and avoid penalties. For example, the Affordable Care Act in the United States requires applicable large employers to provide health insurance to employees working an average of 30+ hours (0.75 FTE).

Full-time equivalent

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. Many laws and regulations related to benefits eligibility, overtime pay, and other workforce standards depend on whether an employee is classified as full-time or part-time based on FTE status.

The baseline in order to qualify as 1.0 unit of a full-time employee is set at 40 hours, so a part-time employee that worked 20 hours would be marked as a 0.5 FTE. Full-time equivalent students[9] is one of the key metrics for measuring enrollment in colleges and universities. The measure is often annualized to cover the average annual full-time equivalent students and is designated by the acronym AAFTE. Once you have your total FTE count, multiply it by $83,200 to find your total spent on full-time equivalent workers. If so, confirm you’re offering the right level of health insurance to your team to prevent a tax penalty.

How Do You Work out the FTE?

Businesses use the FTE calculations for a variety of purposes, and the most common ones are presented below. We’ll also show you how to perform various calculations that involve FTEs, and provide you with automatic calculators that will help make the process easier. Declining FTE percentages may indicate problems retaining full-time staff. HR can analyze FTE ratios to ensure the workforce alignment supports desired cultural goals. By multiplying the number of FTEs by the average cost per FTE, HR can predict total labor budget needs more precisely than just using headcount alone.

• If your company considers the number of hours for a full-time position as 40 hours per week, note that working 30 or more hours counts as 1 FTE for purposes of ACA compliance.
• 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.
• Actual hours worked per week is the exact number of hours an employee worked.
• These rates will depend on the PTO accrual rate policies of a company, organization, or institution.
• Her work has been published in Sitepoint, Fast Capital 360, Social Media Today, WPMayor among other publications.
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