How to calculate your workforce full-time equivalent?

full time equivalent

It requires employers to calculate the full-time equivalent to determine whether the law applies to their company. Employees who work 40 hours per week fall in the 1.0 full-time category.

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.

Full-time employees are entitled to up to 80 hours of EPSL, and part-time employees are entitled to EPSL in the amount of the average number of hours they work over a two-week period. Apart from the FFCRA, certain states and local jurisdictions also require employers to provide paid sick leave to employees. These laws typically require the employee to work in the jurisdiction for a minimum number of hours to be eligible for sick leave.

What is a full-time equivalent employee?

When calculating your FTEs for basic accounting or business purposes, the simplest way to do it is to divide total annual work hours for all employees by an average full-time annual work schedule. According to the IRS and the ACA, part-time employees work fewer than 30 hours a week on average.

If there is no time constraint, you can hire 5 people to complete the same project. Hiring 7 employees full-time and 1 part-time gives you an FTE full time equivalent rate of 7.5, and you can complete the project in 20 days. The Patient Protection and Affordable Care Act specifies how an FTE is calculated.


A few states also require overtime when employees work more than a certain number of hours in a workday, among other situations. When an employee works a typical full-time workweek, the equivalent of all employees who work full-time is calculated by dividing the scheduled hours of the employee by the total number of hours worked. For the purposes of calculating FTE, most employers consider a full-time employee one who works between hours a week. Although the DOL doesn’t define what a full-time employee is , the IRS does, so make sure that as work roles change, you keep up-to-date records of your FTE employees. Your FTE calculations must be accurate for IRS and Department of Labor reporting. At 50 FTEs, you’re required by the ACA to provide health insurance to your employees and by the FMLA to allow employees to take up to 12 weeks of leave for qualifying conditions. Full-Time Employees generally work more than 4 days or 30 hours a week and are permanently employed, as opposed to being temporary or seasonal.

Appeared in G2 Crowd Learning Hub, The Good Men Project, and Pick the Brain, among other places. The Paycheck Protection Program, established by the CARES Act, provides funds to small business owners to help them keep their workers on payroll.

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