It is crucial to note that the definition of full-time employment varies by company and industry, therefore 100% FTE may not always mean the same thing across organizations. Setting an error budget allows teams to prioritize items that are more vital to the product’s success and ensuring that they are produced with a greater level of reliability. Improved efficiency – FTE allows you to accurately assess the amount of resources needed for a project and scale up or down as the project progresses.

However, if your company employs part-time employees as well, several of them together may equal 1.0 FTE. To calculate the FTE for all employees in your company, consider the full-time and part-time employees you employ. 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. This is applicable if an employee has made 120 qualifying monthly payments while working as a full-time employee .

How to calculate FTEs to determine the headcount needed for a project?

Yearly, a company generally considers an FTE to be valued at 2,080 hours. To delve further into the matter, let’s look at how FTEs are calculated. Determining the FTE of your company is crucial for its productivity. Imagine that, with the same FTE, an employee can deliver 100 units, while another only delivers 30.

To calculate the FTE metric, find the average number of FTEs per month from two different time periods . If you’re trying to determine whether or not you’re an ALE in the United States, you should use the IRS’s minimum of a 30-hour work week in your calculation. The IRS taxpayer advocate service has created an estimator that can help with this calculation. If you increase your opening hours and are open every day of the week, then you have a 0.875 FTE. If the trucks open at the same time, then you require two different people to run them. In other cases, you’ll need multiple employees to fill the quota—two part-timers, four employees that only work 10 hours a week, etc.

Business

By signing up, you agree to our terms of service, privacy policy and to receiving marketing communication from Toggl Track. Toggl Track is the time tracker that can slot into any team’s workflow. Get crystal-clear insights into what your team members do with their time and see which team members are overworked, and which ones can take on more. Though estimates are estimates, you can get a quick picture of your employee cost withsimple multipliers. Use the data you gathered for the last section’s analysis to create benchmarks for timing your hiring decisions. In fact, you provide more room for each employee to work than your competitor; you don’t need to expand your facility to match their productivity figures.

Divide this total number by 40, and then round the total to the nearest tenth to get the total fte meaning. FTE offers a systematic method to determine the requirement for upcoming projects and the number of hours needed to complete tasks. As a result, it is a very beneficial measurement tool for long-term business strategy. You can determine how many hours your project needs, and after calculating the equivalent EFT of that hour, you can hire the number of people the project requires to be completed.

FTE Calculation Example

This will help you act proactively and take corrective measures ahead of time. FTE tracking allows you to aggregate the capacity of role-based employees. For example, if you have 20 content writers with a capacity of 0.7 FTE each, then their aggregate is 14 FTE. You can use the aggregate for accurate role-based resource management and assign tasks. Moreover, the absence of a unified measure can lead to inaccuracies in project planning, causing billing loss in the future. It’s high time to put an end to these inadequacies and give your resource management process an edge.

Our part-time employee’s annual FTE salary would be 26,400 dollars and their weekly pay would be 507 dollars. Like we mentioned, some employees count 37.5 to be the standard workweek, which is the number of hours actually worked when you exclude the breaks. The FTE also determines any business as an applicable large employer . Full-time employees usually work 40 hours each week for over 120 days a year, but it also includes anyone who works more than 30 hours weekly. Add all of the hours from full-time workers together to use for your calculation.