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The calculation of full-time equivalent (FTE) is an employee's scheduled hours divided by the employer's hours for a full-time workweek. When an employer has a 40-hour workweek, employees who are scheduled to work 40 hours per week are 1.0 FTEs. Employees scheduled to work 20 hours per week are 0.5 FTEs.
“Employers may use the FTE calculation for different purposes, such as benchmarking revenues or profits per employee. Converting hours worked by part-time employees into full-time equivalents can be helpful when calculating these metrics. Some laws, such as the Affordable Care Act (ACA), specifically define how an FTE is calculated and require employers to count FTEs to determine how the law applies to their organization.”
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