FTE Calculator
Convert employee hours into full-time equivalents (FTEs). Calculate workforce capacity, cost per FTE, and use batch mode to process multiple employees at once.
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Understanding Full-Time Equivalent (FTE) Calculations
Full-Time Equivalent — or FTE — is one of the most fundamental workforce metrics used by HR professionals, finance teams, and business leaders. It standardizes employee headcount into a single, comparable number that accounts for varying work schedules, making it easier to budget, plan, and report on workforce capacity.
The FTE Formula
The basic FTE calculation is straightforward:
FTE = Total Hours Worked ÷ Standard Full-Time Hours
For most U.S. businesses, the standard full-time workweek is 40 hours, which equals 2,080 hours per year (40 hours × 52 weeks). An employee working 40 hours per week counts as 1.0 FTE, while a part-time employee working 20 hours per week counts as 0.5 FTE.
Why FTE Matters for Your Business
FTE is used across nearly every business function:
- Budgeting & Forecasting: FTE helps finance teams calculate labor costs accurately by normalizing headcount across full-time and part-time employees
- ACA Compliance: Under the Affordable Care Act, businesses with 50+ FTEs (using a 30-hour standard) must offer health insurance or face penalties
- Project Planning: Knowing your FTE capacity helps managers allocate resources realistically across projects
- Benchmarking: Comparing revenue-per-FTE or cost-per-FTE across departments or against industry peers reveals operational efficiency
- Grant & Contract Requirements: Many government grants and contracts require FTE reporting as a condition of funding
FTE for ACA (Affordable Care Act) Purposes
The ACA uses a different standard than most businesses. Under ACA rules, a full-time employee works 30 or more hours per week (not 40). To determine if your business qualifies as an Applicable Large Employer (ALE), you calculate FTE using the 30-hour threshold:
- Count all full-time employees (30+ hrs/week)
- Add all part-time employee hours for the month
- Divide part-time hours by 120 (30 hrs × 4 weeks)
- Add full-time count + part-time FTE = Total ACA FTE
If your monthly average exceeds 50 FTEs, you're subject to ACA employer mandate requirements including offering qualified health coverage to full-time employees.
FTE vs. Headcount: When to Use Each
Both metrics have their place. Use headcount when you need to know how many individuals are on your team — for example, ordering laptops, planning desk space, or counting participants in a training. Use FTE when you need to understand work capacity, budget labor costs, or compare workforce size across departments with different part-time ratios.
For example, a department with 8 employees (4 full-time, 4 half-time) has a headcount of 8 but only 6.0 FTEs of capacity — a meaningful distinction for resource planning.
Calculating Cost per FTE
Cost per FTE goes beyond just salary. A fully-loaded cost per FTE includes base salary, benefits (typically 20–30% of salary), payroll taxes (7.65% for FICA), workers' compensation, equipment, and office space. For a rough estimate, multiply the base salary by 1.25–1.4 to get the true cost per FTE.
Our FTE calculator above helps you compute basic FTE counts and salary-based costs. For comprehensive workforce analytics that track FTE trends over time, tinyteam's HR platform provides real-time dashboards, automated headcount tracking, and labor cost reporting for small teams.
Frequently Asked Questions
What does FTE stand for?
FTE stands for Full-Time Equivalent. It's a unit of measurement that represents the workload of a full-time employee. One FTE equals one employee working a standard full-time schedule — typically 40 hours per week or 2,080 hours per year in the United States.
How do you calculate FTE?
To calculate FTE, divide the total number of hours worked by all employees by the standard full-time hours (usually 40 hours/week). For example, if you have 3 employees working 40, 30, and 20 hours per week, total hours = 90. FTE = 90 ÷ 40 = 2.25 FTE.
Why is FTE important for businesses?
FTE is critical for workforce planning, budgeting, and compliance. It helps standardize headcount comparisons across departments, calculate per-employee costs, determine eligibility for benefits programs, and meet ACA (Affordable Care Act) reporting requirements. Companies with 50+ FTEs must offer health insurance under ACA.
What is the difference between headcount and FTE?
Headcount is the total number of employees regardless of hours worked, while FTE standardizes everyone to the equivalent of full-time work. A company with 10 employees — 6 full-time and 4 half-time — has a headcount of 10 but an FTE of 8.0 (6 × 1.0 + 4 × 0.5).
How does the ACA define full-time employees for FTE purposes?
Under the Affordable Care Act (ACA), a full-time employee works an average of 30 or more hours per week (not 40). To calculate ACA FTE, add all part-time employee hours in a month and divide by 120 (30 hours × 4 weeks). This determines whether a business is an Applicable Large Employer (ALE) subject to ACA requirements.
Can FTE be greater than the number of employees?
No — FTE cannot exceed headcount. Each employee can be at most 1.0 FTE (working standard full-time hours). Even if someone works 60 hours per week, they're typically capped at 1.0 FTE. FTE is always equal to or less than the total headcount.
