What is full-time equivalent (FTE)? FTE calculator, hours, and use cases

Full-time equivalent (FTE) is a unit that converts the combined hours of your part-time and full-time employees into the number of full-time workers they add up to. One full-time employee equals 1.0 FTE — usually 40 hours a week, or about 2,080 hours a year in the US.

If you manage budgets, projects, or headcount, FTE is a simple way to compare workloads, plan resources, and check which employment laws and benefits your company qualifies for. Below, we explain what FTE means, how to calculate it, how many hours common FTE values work out to, and how FTE salary works — in plain language, with examples. And, best of all, we have also included a handy FTE calculator that you can use to determine employee FTE’s and pro-rata salaries.

What is FTE? (FTE definition + how to calculate full time equivalent)

FTE or full-time equivalent is used to convert the hours worked by several part-time employees into the hours worked by full-time employees. In simple terms, it’s a percentage of how much of a regular full-time workweek is actually worked for the employee, displayed as a decimal (i.e. 50% = 0.5). 

Let’s say your company considers a full-time workweek to be 40 hours. On your team, you have Lisa who works all 40 hours per week. And you have 3 part-time employees: Jack who works 20 hours per week, Leva who works 15 hours per week, and Julia who works 5.

Now, Lisa is a full-time employee, so she is 1.0 full-time equivalents (FTEs). Jack, Leva, and Julia don’t work full 40 hours a week, and to calculate the full-time equivalent of the hours they work, you have to divide each employee’s work hours by the company’s hours for a full-time workweek.

FTE = employee’s scheduled work hours / company’s hours for a full-time workweek.

So, if a standard full-time workweek at your company is 40 hours, but Jack works 20 hours per week, it’s 20/40 or 50%, which translates to 0.5 FTEs. Leva works 15/40 hours, which means 37.5% or 0.375 FTEs, whereas Julia with her 5/40 hours means 12.5% or 0.125 FTEs.

A quick note on the “full-time” number: it isn’t universal. Many US employers treat 40 hours a week (about 2,080 hours a year) as 1.0 FTE, but some use 37.5 or 35, and certain laws use specific FTE thresholds (like the Affordable Care Act, which counts 30 hours per week as full-time employee). Whatever figure your company uses for a full-time week is the baseline that every FTE calculation divides by, so decide on it first.

How many hours is 1 FTE? FTE conversion table

If your company’s full-time week is 40 hours, here’s what the most common FTE values work out to. (If your full-time week is different, divide the same way — the method doesn’t change.)

FTE	Hours per week	Hours per year (52w)	Workdays (8h) per week
1.0	40	2,080	5
0.9	36	1,872	4.5
0.8	32	1,664	4
0.75	30	1,560	3.75
0.6	24	1,248	3
0.5	20	1,040	2.5
0.4	16	832	2
0.25	10	520	1.25

What is a full-time equivalent employee or FTE employee?

If 1 FTE is equivalent to an employee who works a 40 week full-time schedule, then a partial FTE value shows how much each part-time employee or contractor fulfills the role of a full-time worker.

Let’s use our previous example: Jack, Leva and Julia’s hours make up 0.5 + 0.375 + 0.125 or 1 FTEs. In other words, the three together are like one Lisa. And, even though the company employs 4 people, they only have 2.0 full-time equivalent employees.

In other words, a full-time equivalent employee is a combination of the company’s part-time employees. Each of your part-time employees counts as a portion of a full-time employee. When you add multiple part-time employees together, you get one or more FTE employees. 

This is also the difference between FTE and headcount: headcount counts people, while FTE counts full-time workloads. In the example above, the headcount is 4, but the FTE count is 2.0.

What is FTE salary and how to calculate it? 

Because part-time employees work only a portion of full-time hours, they also receive a pro-rata portion of the full-time salary (pro-rata is an HR term which means “proportionally calculated”).

For example, let’s say, Lisa who is 1.0 FTEs, receives $57k a year. Jack, Leva, and Julia would receive the same salary if they worked full time, but because they are not, their salaries are a part of this full-time salary.

For FTE salary calculation you should use this formula:

FTE salary = FTE x full-time salary

So if a full 40-hour workweek is paid $57k, Jack, who works 20 hours and is 0.5 FTEs, earns 50% of the full-time salary, or $28.5k a year in his role. Leva (0.375 FTEs) earns 37.5% of the full-time salary or $21,375, and Julia (0.125 FTEs) gets 12.5% or $7,125 a year.

Bear in mind that FTE isn’t about workload or productivity; it’s only about hours. Even if Jack gets more done working half-time than Lisa, who works full-time, he is still 0.5 FTEs and receives 50% of the FTE salary.

Why should you calculate FTE?

Depending on your position at the company, FTE calculation can be important for several reasons.

1. FTE calculation for resource management

FTE can be used for planning upcoming projects and the total number of people to be scheduled for these tasks, both full-time and part-time. For example, if you have a project estimated to require 60 hours of work, completing it would take 1.5 FTE worth of time.

So, if you know that this task requires 1.5 FTE worth of work, and you have calculated the FTE values of your team, you can use it to distribute the workload in multiple ways.

• 1 FTE (1.5w): 1 full-time employee (40h per week) is solely focused on the project and completes it in 1.5 weeks (40h + 20h).
• 0.5 FTE (3w): You assign this project to the same full-time employee. Since this project is not urgent, they can finish it in 3 weeks by working 20 hours on it per week (and use the remaining half of their time for other tasks).
• 1 FTE + 0.5 FTE (1w): You need it done in 1 week, so in addition to your full-time employee (1 FTE) who spends the entire 40 hour week on it, you also hire a freelancer for 20 hours (0.5 FTE) to work on it simultaneously.
• 0.7 FTE + 0.3 FTE + 0.3 FTE + 0.3 FTE (0.6w): This project is urgent and you need to have it done in 3 days. So you assign it to one full-time employee (8h x 3 days = 24h or 0.6 FTE), and hire three freelancers who will work 4 hours per day (4h x 3 days = 12h or 0.3 FTE per each). This means that from the 1.5 FTE required for the project, 0.6 FTE is done by the full-timer and the remaining 0.8 FTE is covered by the three freelancers.

Tip: Once you know how many full-time and part-time employees you need for a task, use DeskTime’s Shift Scheduling feature to book employee hours. In addition, Project Time Tracking will track actual work hours spent on each task so you can better estimate similar future projects.

2. FTE hours calculation for financial analytics

As a company owner, you may want to compare headcount to profit—a metric that tells you how much profit each of your employees brings in over the course of a given period. Profit per employee will help you understand your company’s overall efficiency. Generally, the higher your profit per employee is, the more efficient your company is.

Profit per employee = business’ net income (= profit) / FTE employees

So, let’s say your company’s net income in a given year was $2.1m, and you had 30 FTE. That’s $70k profit per employee. The next year, the company let a few people go and made $1.8m with 25 FTEs—a profit per employee of $72k, which indicates higher efficiency despite fewer employees.

Tip: With DeskTime’s automatic time tracking, you can gain accurately track work hours and get detailed productivity insights for performance evaluation.

3. FTE calculation for employment laws and benefits

Depending on the country in which your business is established, FTE calculation is needed to determine which employment laws you need to follow or what benefits your company is eligible for.

For example, in the US, the Affordable Care Act (ACA) uses FTEs to decide which employers must offer health coverage. A business with 50 or more full-time employees, plus full-time equivalents, is treated as an “Applicable Large Employer” and assumes additional obligations. So a company with 100 half-time staff isn’t automatically off the hook—100 people working half-time can add up to 50 FTEs, which is enough to cross the threshold.

There are many other programs and laws that apply to companies with a certain count of FTEs – consult an accountant familiar with the laws of the country your business operates in.

To sum up

Now you know what full-time equivalent means, how to calculate it, how many hours common FTE values work out to, and how to figure out FTE salary.

In some resources, FTE is also called WTE or whole-time equivalent. But regardless of what it’s called, it can be a useful unit of measure to allocate human resources to certain projects better, understand how efficient the company and its employees are, as well as to know what programs and laws the company qualifies for.

Frequently asked questions about FTE

How many hours is 1 FTE?

One FTE is a full-time schedule. For most US employers that’s 40 hours a week, or about 2,080 hours a year—but the exact number depends on what your company (or the relevant law) counts as full-time.

How many hours is 0.5 FTE?

Half of a full-time schedule. If full-time is 40 hours a week, 0.5 FTE is 20 hours a week (about 1,040 hours a year).

What does 1.0 FTE mean?

1.0 FTE means one full-time employee’s worth of hours (usually 40 hours). It could mean one full-time employee working the full 40 hours, or multiple part-timer hours added together (for example, four freelancers working 10h per week).

Is FTE the same as headcount?

No. Headcount counts individual people regardless of their schedule; FTE counts full-time workloads. Four people working half-time are a headcount of 4, but only 2.0 FTE.

What’s the difference between FTE and WTE?

They’re the same idea. WTE (whole-time equivalent) is just another name for FTE, more common in the UK and in healthcare.

What does FTE mean in payroll?

In payroll, FTE is used to prorate salaries and benefits and to check eligibility thresholds—for example, deciding a part-timer’s pay as a fraction of the full-time salary.

How do you calculate FTE salary?

Multiply the FTE by the full-time salary: FTE salary = FTE × full-time salary. A 0.5 FTE role at a $57k full-time salary pays $28.5k.

Article written by

Krista Krumina

Krista is the co-founder of Truesix Co, a content marketing and PR agency for tech companies. She is also a freelance contributor to Business Insider and has written for outlets such as NY Observer, TNW, Sifted, Tech.eu, TimeOut, and many more. Her main areas of focus are work life, startups, technology, and entrepreneurship.