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. https://www.bookstime.com/articles/retained-earnings-statement-example A part-time graphic designer working 30 hours per week at that same company would have an FTE of 0.75 since they work 75% of that 40 hours. To determine your total FTE, add the total part-time hours worked, plus the total full-time hours worked. From there, if your full-time hours are 40 per week, divide the number by 2,080.
Understand how accurately gauging FTEs can optimize staffing, predict budgets, and support employee retention – a must-read for every modern HR professional. Cassie is a deputy editor, collaborating with teams around the world while living in the beautiful hills of Kentucky. She is passionate about economic development and fte meaning is on the board of two non-profit organizations seeking to revitalize her former railroad town. Prior to joining the team at Forbes Advisor, Cassie was a Content Operations Manager and Copywriting Manager at Fit Small Business. Use the discount rate calculator to estimate the discount rate of a given flow of payments.
Checking an employee’s FTE with Clockify
These calculations are used to clarify the company’s obligations regarding employee health benefits. Bear in mind that these are just simple FTE example calculations — project managers approach FTE from a different angle while federal programs use different FTE calculation methods. An FTE salary is an employee salary converted into a full-time equivalent salary within a full year, regardless of whether the said employee holds a full-time or part-time position. The actual workload is not taken into consideration for this calculation. Since both are considered to be full-time schedules in their respective companies, both count as a 100% or 1.0 FTE. In practice, these numbers still usually fall somewhere between 32 and 40 hours per week, with 40 hours per week (8 hours per day, 5 days per week) being a common norm for a full-time schedule.
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. Based on a 40-hour FT workweek, you’d need two full-time workers and one 0.5 FTE part-time employee.
How Do You Work out the FTE?
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. First, let’s look at what full-time equivalent or FTE actually means.
