Calculate the FTE number - tips

Video: How to Calculate FTE Full Time Equivalent

Content

Steps
Advice

FTE, which stands for Full-time equivalent, means full-time equivalent and represents the number of hours worked that a full-time employee completes in a given period of time. such as a month or a year. You can use the FTE number to convert working hours to the number of people needed to complete the job, to help simplify the planning process. The FTE number also helps budget analysts and project managers estimate labor costs. In addition, thanks to the FTE number, managers can also determine whether the overtime costs are worth hiring new full-time or part-time employees.

Steps

Method 1 of 3: Calculate the FTE

Find part-time employees working hours. Based on accounting records to determine the number of hours worked by part-time employees. This applies to companies that employ both full-time and part-time employees.
- Multiply the total number of hours worked per week by the number of weeks worked for each part-time employee. For example:
  - A part-time employee works 15 hours per week for 30 weeks: 1 x 15 x 30 = 450 hours
  - Two part-time employees working 20 hours / week for 40 weeks: 2 x 20 x 40 = 1600 hours
- Add up the results to get the total hours worked for the part-time employee.
  - For example: 450 + 1600 = 2,050 part-time hours
Calculate the number of hours worked by full-time employees per period. A full-time employee is someone who works up to 40 hours (minimum 30 hours) per week for more than 120 days per year.
- The number of employees multiplied by 40 (8 hours a day x 5 days a week).
  - For example: 6 full-time employees: 6 x 40 = 240 hours
- Multiply this result by 52 (the number of weeks in a year).
  - For example: 240 x 52 = 12,480 hours of full-time work
Add all hours worked full time with part time. The result is the total number of hours worked by all employees.
- For example: 12,480 (full-time hours) + 1,600 (part-time hours) = 14,080 total working hours
Divide the total hours worked by the number of full-time hours. This calculation will help determine the company's FTE number over a specified time period.
- Holiday time and other forms of paid leave (sick leave, maternity leave, etc.) are included in the number of hours worked. So you don't need to do any special calculations for these hours.
- Divide the total hours by 2,080. 2,080 is the fixed number obtained from the following equation: 8 hours in a day x 5 days a week x 52 weeks in a year. This final step will help you calculate your annual FTE number.
  - For example: 14,080 (total working hours) ÷ 2080 = 6,769 FTEs
- Divide the total hours worked by 173.33 to calculate the FTE per month.
  - For example: 4,000 (working hours in February) ÷ 173.33 = 23.07 FTEs
- Divide the total hours worked by 8 to calculate the FTE per day.
  - For example: 80 hours of daily work ÷ 8 = 10 FTEs
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Method 2 of 3: Use an online FTE calculator

Find the FTE calculator online. With the online calculator, just enter the number of part-time employees working full-time and the number of hours worked per week by part-time employees. The online tool will then calculate and give you an estimated FTE value. You can find a reputable FTE calculator at https://www.healthcare.gov/shop-calculators-fte/ and http://www.healthlawguideforbusiness.org/fte-calculator.
Find employee data. You need both data on the total number of full-time employees and the hours worked by part-time employees. This information is usually listed and recorded in the accounting records. Note: a full-time employee is an employee who works more than 30 hours per week.
Insert information. Enter employee data in the correct field on the calculator. Make sure to check whether the hours entered are weekly, monthly or yearly, and correct the data accordingly. Check your information again before pressing the "calculate" button to make sure there's no error.
This calculation of the FTE is only an estimate. Remember, the results you get from the FTE calculator are estimates only. You can use this figure to make a rough estimate of the FTE value for instructional or educational purposes. Of course, these calculations should never be used as a substitute for legal advice or tax advice by an expert in the field. And when you need 100% accurate calculations for business purposes, you need to use a different method. advertisement

Method 3 of 3: Use professional FTE calculation method

Hire a tax professional to calculate FTE for your company. Calculating the FTE is so important that you need to make sure it's done correctly. If there are errors in the calculation, it can negatively impact many aspects of the business, including profit prediction, taxation and others. So, if you are not confident in correctly calculating the FTE number for your business, hire an accountant with a lot of experience in the field to calculate it for you.
- If you hire an accountant, you need to provide enough important information about your business so that the accountant has the information needed to calculate the FTE.
- Accountants also need access to employee documents, prior tax documents, and other similar types of documents.
Get help from a legal professional. Some attorneys with experience in this area can help you with calculations to ensure accurate results. You should seek advice from a tax attorney to help calculate FTE.
Use the FTE number to calculate the business index. The FTE analysis can be a useful tool for assessing the number of employees needed for part or all of your business. Business owners can also track the overall employee growth trend over the years in a more clear way by analyzing the change in FTE. You can also compare FTE with other metrics to evaluate how the additional employees contribute to the business profit or revenue.
- If your business employs part-time employees, you should convert part-time working hours to equivalent full-time hours.
- You can also use the FTE to compare demographics to income or square feet (UK-US acreage), which is useful for budgeting decisions. and hire / fire.
FTE calculation for health insurance. Another application of the FTE is to calculate the size of a small business for health insurance purposes. Specifically, the Small Business Health Options Program (SHOP) requires businesses to have less than 50 FTEs to join. This program provides a reasonable and high quality employee insurance policy for business owners. However, in addition to the FTE number, the business must also meet other criteria to be eligible.
Use the FTE number to calculate the number of students enrolled. FTE is also used as "full-time enrollment" for colleges and other similar institutions to enroll full-time and part-time students. Instead of working hours, class hours are used, with full-time students being students with sufficient credit (typically 12 hours per week) and part-time students studying under 12 hours per week. . However, different schools may have different credit hours requirements for calculating FTEs. advertisement