Full Time Equivalent (FTE)

What is FTE?

FTE stands for Full Time Equivalent. It is a unit of measurement that represents an employee’s work hours on a weekly full-time basis.  

How to calculate an FTE?

Full-time equivalent (FTE) is calculated by dividing an employee's scheduled hours by the company’s work scheduled hours on a weekly full-time basis.  

If a company has work schedule of 40 hours a week, the employees expected to work 40 hours per week are 1.0 FTEs.  

Whereas, employees that works 20 hours per week are considered 0.5 FTEs.

For example, John works 25 hours in a company where 38 hours is considered a full-time schedule, his FTE would be 25 / 38 = 0.6 FTEs

What is a full-time equivalent employee?

Full Time Equipment is based on the total number of hours worked, and not the number of people employed by an organization.  

One full-time worker on a full-time schedule = One full-time equivalent employee hours.  

Two part-time workers or students working exactly half of the company's official full-time schedule = 1 full-time equivalent employee  

Four part-time employees working exactly a quarter of the company's official full-time schedule = 1 full-time equivalent employee.

What does FTE 100% mean?

A 100 percent FTE is the same as a 1.0 FTE. It can refer to either one person's work calculating full-time or numerous people doing the functions of one full-time employee.

What is the purpose of FTE?

FTE is frequently used to assess an employee's workload and its contribution to a project, or to track cost savings in a company. FTE in salary is necessary for accounting, as well as calculating the company's costs while compensating its employees.

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