Keep reading to find out everything you need to know about calculating FTEs and how to use them. To calculate your FTE when applying for a PPP loan, take the average number of hours worked by employees each week for the covered period, divide by 40, and round to the nearest tenth. For a PPP loan, a full-time employee is considered to work at least 40 hours per week, and no single employee can have an FTE exceeding 1.0. Let’s say that fte meaning a full-time weekly schedule in your company is 40 hours per week, and your employees are scheduled with 40 hours of work a week (which makes them full-time employees). This is a straightforward example since each employee who works 40 hours per week in your company has a 1.0 FTE. To identify the FTE for part-time positions, divide the total number of part-time hours worked by the number of hours worked by one full-time worker.
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Various FTE formulas accommodate different timeframes and employee types. For weekly calculations, FTE equals total hours worked divided by standard weekly hours (e.g., 40 hours). Monthly FTE is total hours divided by standard monthly hours (e.g., 160 hours). Yearly FTE divides total hours https://www.bookstime.com/ by standard yearly hours (e.g., 2,080 hours). Part-time and seasonal workers contribute to FTE by calculating their hours worked as a proportion of full-time hours. For example, if a part-time employee works 20 hours per week and standard full-time hours are 40, their FTE would be 0.5.
Calculating FTE for ACA
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The Paycheck Protection Program (PPP) was launched by the US Small Business Administration (SBA) to help businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. If you want your PPP loan to be completely forgiven, you need to keep the number of FTEs during the 24-week PPP period the same as it was prior to COVID-19. So, how can you calculate the FTE of your company and make sure you’re eligible for PPP?
Example FTE Calculation
Still, this doesn’t have to be the case in all organizations as certain employees may work 7 hours one day and 9 hours the next day. It is then important to note that some FTE calculations do involve a fair amount of assumptions. For example, some governments may simplify the process by assuming each part-time worker to be 0.5 FTE, regardless of the hours they work.
- Figuring out exactly how many people work for a company is more complicated than asking for a show of hands.
- With three part-time positions, this results in a value of 1.5.
- In step 4, we learned that the total number of work hours for all employees in a single week equals 153.
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- So, if your standard work week consists of 40 work hours, your employees probably work 8 hours per day.
- The Paycheck Protection Program (PPP) is a Small Business Administration (SBA) program to help employers retain employees during the public health and economic crisis.
- To calculate the total FTE, add the number of FTEs worked by full-time employees (1 FTE for each full-time worker) to the part-time FTE you calculated in step five.
What Is Full-Time Equivalent? How to Calculate FTE
If your company considers the number of hours for a full-time position as 40 hours per week, note that working 30 or more hours counts as 1 FTE for purposes of ACA compliance. Legal rules are important when calculating Full-Time Equivalent (FTE), making sure companies follow labor laws and industry standards. Key global rules affecting FTE include the Fair Labor Standards Act (FLSA), laws on working conditions, healthcare rules, union deals, tax and benefits laws, and data privacy rules. Employers must calculate FTE accurately to determine things like overtime pay and staffing needs. Staying up-to-date on laws, getting legal advice, and having clear processes are crucial to ensure FTE calculations are legal and fair to workers while following the rules.
- If you have at least 50 FTEs employees, you are an ALE for the year, which means you are subject to specific reporting requirements and share responsibilities under the ACA.
- Some may even assume any employees who work more than 20 hours a week to be 1 FTE.
- The Paycheck Protection Program (PPP) is designed to prevent job losses during the pandemic by giving loans to small businesses to cover payroll expenses and other costs.
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