Based on the FTE value, some of your employees could be eligible for minimum or affordable healthcare insurance. Knowing this will help you stay compliant with state and federal laws. Under ACA, any employee that works at least 30 hours per week, or 130 on a monthly basis, is entitled to some form of healthcare. Planning a new project and making estimates can be tiresome, especially when you have employees with different types of contracts (part-time, full-time, and freelancers) working for your company. FTE calculations make it easier for you to assign different personnel to different projects or specific tasks based on their overall performance and contribution to your company. To calculate your yearly FTE, you should calculate the work hours of all of your employees for that one year and divide that number by the ideal number of work hours per year for one full-time employee.
Make a List of All Employees & Hours Worked
FTE is a valuable tool for organizations across various industries as it aids in efficient resource allocation, budgeting, and decision-making. Full-Time Equivalent (FTE) serves as a crucial unit of fte meaning business measurement that simplifies the way businesses assess their workforce. By translating the work done by both full-time and part-time employees into the equivalent of full-time workers, FTE offers a cohesive view of the labor force. FTE is a powerful tool that helps organizations manage their workforce, plan budgets and measure performance.
- These aspects can discourage part-time employees from advancing their careers.
- FTE is the total number of full-time equivalent employees on your staff.
- Stay on top of FTE trends and leverage HRIS tools to master this essential workforce metric.
- Use employee directory software like Connecteam to store details securely, have a single source of truth, and easily export customizable data sheets.
- Export an up-to-date list of all your part- and full-time employees, and the number of hours they work per week, month, or year.
- Full-time equivalent (FTE) is the number of working hours spent by one full-time employee during a fixed period, which may be one week, one month, or, for example, one year.
- FTE or full-time equivalent is a tool to help you gauge the potential productivity of your business or company.
How technology can help you calculate FTE
Sign up to receive more well-researched human resources articles and topics in your inbox, personalized for you. You’ll find the answers to all these questions and more and learn how to calculate FTE step-by-step. It is important to consider what your ideal work schedule means to you and what your priorities are. With this information, you can better navigate your career and make informed decisions that Insurance Accounting will help you achieve your professional goals. Understanding FTE and its differences from full-time is crucial for anyone interested in the job market.
FTE vs. Headcount
You are required to offer suitable health care for your employees if, according to the calculations given above, your calculation yields 50 FTE or more. There are four people working for Company A. Two workers put in forty hours each week. Get a complete rundown of all the workers who had W-2s sent to them at the end of the year. Day.io offers a comprehensive solution for convenient and accurate FTE calculation to aid in this process. By streamlining workforce management, Day.io ensures optimal leverage of your human capital, aligning it with your business objectives. Sign up for Day.io today and redefine how you understand and manage your workforce.
- For the purposes of calculating FTE, most employers consider a full-time employee one who works between 30 to 40 hours a week.
- Most businesses rank full-time employees as those who work 40 hours per week.
- At that point, they must fulfill the employer shared responsibility provisions and annual reporting obligations of the ACA.
- In this case, Employee C’s FTE exceeds 1, indicating that they contribute more than the workload of a single full-time employee due to their overtime hours.
- You calculate an employee’s FTE by dividing their hours by the standard full-time hours.
Understanding these scenarios and factors influencing FTE calculations is essential for effective workforce management and resource allocation within your organization. Calculating Full-Time Equivalent (FTE) is a fundamental aspect of assets = liabilities + equity workforce management. It allows you to convert the various working hours of your employees into a standardized metric, making it easier to analyze and plan your workforce effectively.
Keeping FTE ACA-Compliant: What You Need To Know
- While Full-Time Equivalent (FTE) is a valuable metric, it comes with its own set of challenges and limitations that organizations must be aware of when using it for workforce management.
- Three full-time employees would have an FTE of 3.0 and the part-time FTE is 0.875.
- At the bottom of the hours column, add up all employee hours using the Excel SUM function.
- A full-time equivalent (FTE) is a unit of measurement used to figure out the number of full-time hours worked by all employees in a business.
- One part-time employee who works ten hours per week and one part-time employee who works 25 hours per week.
Determining one FTE is based on the number of hours considered full-time in your business. Most businesses rank full-time employees as those who work 40 hours per week. However, according to the ACA, any employee who works at least 30 hours per week is considered full-time. (For a year, that is 2,080 hours with 40-hour workweeks and 1,560 hours with 30-hour workweeks, which is considered full-time for ACA reporting). FTE is specific to the hours of service worked by non-full-time employees. For example, a company with 45 full-time employees and 14 part-time employees has a head count of 59.
