With this FTE Calculator, you can quickly calculate how many full-time equivalent employees are on your team. As it helps you work out how many manhours of work are being done, FTE calculation is an important part of business planning.
In this article, we will not only explain to you the Full-Time Equivalent (FTE), but we will also provide examples, helping you fully understand how to calculate FTE for your company. Plus, you’ll need to understand what FTE is and how to perform the FTE calculation if you want to calculate SA VAT for adding 15% South African VAT. Interested? Well, keep reading! And don’t forget to check out our dedicated VAT Calculator.
What Is a Full-Time Equivalent (FTE)?
The concept of a full-time equivalent (FTE) serves as a means to determine the total number of hours worked by all employees in a business as if they were working full-time hours. If a full workweek in your business constitutes 40 hours, then an employee working precisely 40 hours a week would equate to an FTE of 1.0. Conversely, an employee engaged in part-time work, dedicating only 20 hours per week, would possess an FTE of 0.5. This illustrates that their accumulated hours mirror half of a full-time employee’s commitment.
Advantages of FTE Calculation
- Enhanced Budgeting: FTEs prove invaluable for the purpose of budgetary deliberations. Managers and executives utilize this metric to appraise labor expenses and project timelines for specific tasks or undertakings. Simultaneously, financial teams leverage this information while formulating financial projections and ascertaining individual employee contributions to revenue and profits.
- Workload Assessment: FTEs provide a means to assess the capacity for hiring both full-time and part-time personnel within an organization, along with determining the requisite hours of labor. This proves valuable in aligning employee productivity with the evolving schedules and financial frameworks of part-time staff.
- Strategic Hiring Contemplations: The concept of a full-time equivalent also proves instrumental when contemplating the cost-effectiveness of hiring a part-time worker versus a full-time employee. Furthermore, organizations can gauge the prorated salary for part-time personnel, based on the FTE measurement.
How to calculate FTE
Calculating Full-Time Equivalents (FTE) involves determining the total number of working hours contributed by multiple employees, normalized against a standard full-time workweek (usually 40 hours). The formula for calculating FTE is:
Full-Time Equivalent (FTE) = Total Hours Worked by Part-Time and Full-Time Employees ÷ Number of Available Full-Time Hours in Year
Total Hours Workedis the sum of the hours worked by all employees.
Standard Hours in a Full-Time Workweekis the standard number of working hours in a full-time workweek (usually 40 hours).
Here’s how you can calculate FTE using the inputs from the FTE Calculator:
- Number of Employees: The total number of employees you want to calculate FTE for.
- Working Hours: The total number of hours worked by all employees combined. This can be weekly, monthly, or any other period you’re interested in.
For example, let’s say you have 5 employees, each working 30 hours per week. You want to calculate the FTE for this scenario:
Number of Employees: 5
Working Hours per Employee: 30
Total Hours Worked = Number of Employees × Working Hours per Employee
Total Hours Worked = 5 × 30 = 150 hours
Standard Hours in a Full-Time Workweek: 40 hours
FTE = Total Hours Worked / Standard Hours in a Full-Time Workweek
FTE = 150 / 40 = 3.75 FTE
In this example, the total hours worked by all employees (150 hours) were normalized against a standard full-time workweek of 40 hours to calculate an FTE of 3.75.
Remember that FTE is used to express the total workload in terms of a full-time employee’s contribution. It’s a way to quantify and compare the effort contributed by part-time or multiple employees against a standard benchmark.
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Editorial Note: Editors and site owners are not liable for damage or loss of profits caused by the use of a SA FTE Calculator or the inability to use information from this site. You are using this page at your own risk.