There are companies that have a significant number of people working part-time, i.e., workers who spend only a short time in the company. Clockify is a time tracker and timesheet app that lets you track work hours across projects. FTE has several different uses and several different calculation methods, depending on why you want to calculate it. It will help you plan your project work, set deadlines, and work out your budget. Within this method, the employee is credited with 8 hours for each day they would be required to work at least 1 hour (including PTO).

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. The underlying period can be, for example, a day, a month or fte meaning even a year. Being a basic criterion in staff controlling, it is one of the most important staff indicators for companies. Particularly due to the development in the part-time sector, your staff planning will be more comprehensible and controllable with this ratio.

What is the difference between FTE and number of employees?

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. Five of them work full-time (40 hours per week), three occupy a part-time position each working 20 hours a week, and the other two each work 10 hours per week. 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.

• If FTEs exceed healthy limits, implement adjustments such as delegating tasks, hiring additional support, or extending project timelines.
• Once you have a total number of hours, divide by 2,080 and round down for your FTE.
• The part-time employees, on the other hand, work 20 hours per week and 25 weeks out of the year.
• The Paycheck Protection Program (PPP) is a Small Business Administration (SBA) program to help employers retain employees during the public health and economic crisis.
• To calculate an FTE salary, you must convert an employee salary into a full-time equivalent salary within a full year, regardless of whether the employee has a full-time or a part-time position.
• You can also use the FTE total to remain compliant with federal, state and local labor laws that may be based on employer size, such as mandatory sick time laws.

Let’s say that a full-time weekly schedule in your company is 40 hours per week, and your employees are scheduled with 40 hours of work a week. This is a straightforward example since each employee who works 40 hours per week in your company has a 1.0 FTE. As you can see, the part-time employees are converted into the performance of a full-time 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. One part-time employee who works ten hours per week and one part-time employee who works 25 hours per week.

How Do You Work out the FTE?

If your project is estimated to need 250 hours of work to complete, take those 250 hours and divide them by 8 hours, a normal full-time workday. You’re left with 31.3 (rounded to the nearest tenth) which is equal to how many full-time employees you would need to fulfill those 250 hours of project time. You can use your business’s definitions for https://www.bookstime.com/ full-time and part-time employees. When you apply for a PPP loan, you will need to include your documents showing the number of full-time equivalent employees on your payroll. Full-time equivalents (FTEs) is a metric that measures the total number of full-time employees you have based on hours worked rather than the exact number of employees.

Identify potential overloads or assess individual FTEs regularly to detect signs of potential burnout or overwhelming workloads. Imagine you’re launching a new marketing campaign requiring content creation, social media management, and data analysis. Learn more about small business finance and accounting on our resource guide. All you need to do is to go to your Project Planner and use the toggle to see your projects in FTEs.

Example #3: 2 full-time employees and 5 part-time employees / 40-hour workweek

She has spent the last year and a half working at a software company, managing content about CRMs, project management tools and other tech topics. Some laws, such as the Affordable Care Act (ACA), specifically define how an FTE is calculated and require employers to count FTEs to determine how the law applies to their organization. To convert an employee’s full-time equivalency into standard hours, multiply their FTE rate by 40. For example, if an employee has an FTE of 0.80, multiplying that number by 40 means that an employee works 32 hours a week. Bring the power of award-winning HR software to time tracking for your employees, managers, and payroll team.