How to Calculate FTE Hours

Measuring FTEs

Measuring the number of hours worked in terms of full-time equivalents--or FTEs--is a way to compare and benchmark the total hours worked by a workforce. The metric provides a standard way of measuring a company's workforce across industries. For instance, a company could have 500 people on staff, but only 400 FTEs if some of the workers are part-time employees. Comparing just the number of employees, rather than looking at FTEs, may give the wrong impression and lead to poor decision-making.

Instructions

1. Define FTE for your organization. FTE refers to the number of hours worked that add up to one full-time employee. For most companies, this is based on an eight-hour day, for a five-day week, 52 weeks out of the year. This equates to 2,080 hours per year. Some companies may have different workweek requirements, so it is important to define your own "equivalency."

2. Determine your daily FTE equivalency. If the average worker in your organization works 2,080 hours a year, based on a five-day workweek, the daily FTE is eight hours. However, if your organization runs a four-day work week, the daily FTE is 40 divided by four, or 10 hours. You can also calculate this by taking the total number of work hours for the year and dividing by 2,080.

3. Compare FTEs between one person working full time and two people working full time and part time, respectively, in a five-hour workweek. Based on the 2,080-hours-per-year FTE schedule, as outlined above, one person working full time equals one FTE. If two people work for four hours, five days a week, this is also equivalent to one FTE.

4. Calculate FTEs based on monthly hours worked. You can also calculate FTEs based on the number of labor hours worked in one month by dividing by 173.33. For instance, if your employees worked 4,000 hours in one month, the FTE would be 4,000 divided by 173.33 or 23.1.

5. Calculate the number of hours required in one day. The operative word is "required." This is an approach used for budgets and planning purposes. For instance, if you have 10 full-time employees (eight hours a day) and five part-time employees (four hours a day), your daily staffing would be (10 full-time employees times eight hours) plus (five part-time employees times four hours) equals 100 total hours worked. If you divide 100 (total hours worked) by eight (hours in one day), it equals 12.5 FTE compared to with employees. Again, this information is more useful to management in terms of making staffing decisions than just looking at the number of people employed by the company.

References

• Lawrence Berkeley National Laboratory: Presentation on FTE Calculation

Resources

• Read this Article in Spanish
• Syracuse University: FTE Calculator