How to Calculate FTE: A Comprehensive Guide

Full-time equivalents (FTEs) are a common metric used in business to measure the amount of work performed by employees. An FTE is defined as the number of hours worked by a full-time employee in a given period, usually a year. FTEs are used to compare the workload of different employees or teams, to plan staffing levels, and to budget for employee compensation.

Calculating FTE

Calculating FTE is a straightforward process, but there are a few things you need to keep in mind:

Start by defining the period for which you want to calculate FTE. This is usually a year, but it could be any period of time.
Gather data on the number of hours worked by each employee during the period. This data can be found in employee time cards, payroll records, or other sources.
Convert the number of hours worked by each employee into full-time equivalents. To do this, divide the number of hours worked by the number of hours in a full-time work year.
Add up the FTEs for all employees to get the total FTE for the period.

Example

Let’s say you have three employees who worked the following hours during the year:

Employee A: 2,000 hours
Employee B: 1,500 hours
Employee C: 1,750 hours

To calculate the FTE for each employee, we would divide the number of hours worked by the number of hours in a full-time work year (2,080 hours):

Employee A: 2,000 hours / 2,080 hours = 0.96 FTE
Employee B: 1,500 hours / 2,080 hours = 0.72 FTE
Employee C: 1,750 hours / 2,080 hours = 0.84 FTE

The total FTE for the period would be 0.96 FTE + 0.72 FTE + 0.84 FTE = 2.52 FTE.

Tips for Calculating FTE

Be accurate when counting hours worked. This means including all hours worked, including overtime, sick time, and vacation time.
Use a consistent definition of FTE across all employees. This will ensure that the FTEs you calculate are comparable.
Document your calculations. This will help you track changes over time and ensure that your FTE calculations are transparent.

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