What is Full -time Equivalent (FTE)?
FTE stands for "Full-Time Equivalent", which is the total amount of hours that a single full-time employee has worked over any period.
- Full time equivalent is based on a full-time basis of the time one employee/worker has worked.
- This method is used by organisations to convert the hours of part-time employees into FTE units by calculating the sum of part-time and contract employees divided by the FTE unit.
- There are different reasons for business using full-time equivalent, for example, profits per employee or benchmarking revenues.
- There are laws in place to state how to carry out calculations correctly, such as The Patient Protection and Affordable Care Act.
How is FTE Calculated?
At a typical UK company, FTE would probably be the standard 40-hour workweek:
- Eight hours per day,
- Five days per week.