Full-time Equivalent (FTE) Employee Calculator

What Is Full-Time Equivalent (FTE)?

Full-Time Equivalent, or FTE, is a way to measure your workforce based on hours worked, not just how many people you employ.

At its core, FTE answers one practical question:

“How many full-time employees would I have if everyone worked a full-time schedule?”

Instead of counting people, FTE converts all employee hours—both full-time and part-time—into a single, standardized number. That number represents your total labor capacity in full-time terms.

This matters because headcount alone can be misleading. A team of 10 employees may sound well staffed, but if several work limited hours, your actual capacity can fall short. FTE removes that guesswork and shows how much labor you truly have available.

What FTE Represents in Workforce Planning

In workforce planning, FTE represents how much work your team can realistically support.

It translates total hours into full-time capacity, which makes it far more useful than headcount when you plan schedules, budgets, or growth.

For example, hiring three part-time employees does not automatically replace three full-time roles. FTE shows the difference by converting hours into full-time units, so you can see the real impact on coverage and workload.

When you plan using FTE, you can:

• Match staffing levels to actual demand
• Spot under- or overstaffing earlier
• Budget labor costs more accurately
• Compare staffing needs across teams or time periods

Without FTE, teams often feel stretched even though “enough people” are employed. With FTE, you can see whether you actually have enough hours to support the work.

What FTE Does Not Measure

FTE measures time, not performance, cost, or effectiveness.

It tells you how many full-time hours are available, but it does not explain how those hours are used.

Two teams can have the same FTE and still operate very differently. One may run smoothly, while the other struggles with overtime, coverage gaps, or uneven workloads. FTE alone cannot explain why.

Because of this, FTE works best when paired with time tracking, scheduling, and workload data. Those tools show how hours are actually spent, not just how many exist.

What Counts as Full-Time Hours

To calculate FTE correctly, you first need to define what “full-time” means in hours.

In the United States, full-time is generally defined as 40 hours per week. This standard is widely used for workforce planning and internal FTE calculations. It also equals 2,080 hours per year (40 hours × 52 weeks).

That said, the 40-hour standard does not apply in every situation. Some laws and government programs use different definitions of full-time, which can change how FTE is calculated for compliance.

Before you calculate FTE, confirm:

• Whether the standard 40-hour workweek applies
• Whether the calculation is for internal planning or compliance
• Which rules or programs affect your reporting

For most day-to-day workforce planning, 40 hours per week is the correct baseline. Once that standard is set, FTE calculations become consistent and reliable.

The Standard FTE Calculation Formula

The standard FTE formula converts total hours into full-time capacity.

The formula is simple:

FTE = Total hours worked ÷ Full-time hours

You add all hours worked during a specific period—weekly, monthly, or annually—and divide that total by your full-time standard for the same period.

For example, if your team works 800 total hours in a week and full-time equals 40 hours:

800 ÷ 40 = 20 FTE

That means your workforce provides the same labor capacity as 20 full-time employees, regardless of how many people are on payroll.

This works because every hour counts the same. Full-time and part-time hours are treated equally, which keeps the calculation clear and consistent.

When the Standard FTE Method Applies

Use the standard FTE method for internal planning and analysis.

This includes situations where you want to:

• Plan staffing levels based on workload
• Compare labor capacity over time
• Build labor budgets and forecasts
• Understand how part-time hours affect coverage

This method does not apply everywhere. Programs like the Affordable Care Act (ACA) and PPP loan forgiveness use different rules.

When FTE affects eligibility or compliance, always confirm which formula applies. Using the wrong method can lead to reporting errors or compliance issues.

How to Calculate FTE Step by Step

Once you’ve defined full-time hours and confirmed the standard method applies, calculating FTE becomes a repeatable process.

Step 1: Set Your Full-Time Hour Standard

Start by defining what counts as full-time.

For most U.S. businesses, this is 40 hours per week. If you calculate FTE monthly or annually, convert that standard:

• Weekly: 40 hours
• Monthly: 173.33 hours
• Annually: 2,080 hours

Choose one standard and stick to it. Changing it mid-calculation will distort your results.

Step 2: Add All Employee Hours Worked

Next, add all hours worked during the same period:

• Full-time hours
• Part-time hours
• Variable schedules

Do not separate employees by role or status. Every worked hour counts the same.

Unless a specific rule says otherwise, use actual hours worked, not scheduled hours or paid time off.

Step 3: Divide Total Hours by Full-Time Hours

Divide total hours by your full-time standard.

The result may be a whole number or a decimal. Both are valid.

For example:
500 ÷ 40 = 12.5 FTE

This number shows your workforce in full-time terms, regardless of how many individuals make up those hours.

FTE Calculation Example

Here’s how this looks in a real business setting.

Imagine a small dental practice with:

• 3 full-time dental assistants working 40 hours each
• 2 part-time hygienists working 24 hours each
• 1 full-time front-desk coordinator working 40 hours

First, calculate total hours worked.

Full-time staff:
(3 × 40) + (1 × 40) = 160 hours

Part-time staff:
2 × 24 = 48 hours

Total hours worked:
160 + 48 = 208 hours

Next, divide by the full-time standard:

208 ÷ 40 = 5.2 FTE

Even though the office employs six people, its labor capacity equals 5.2 full-time employees. That insight helps the practice plan appointments, coverage, and hiring based on reality—not headcount.

Why Businesses Use FTE

Businesses use FTE because it turns workforce data into something they can plan around.

Instead of guessing based on employee count, FTE shows how much work your team can handle and how that capacity changes over time.

Budgeting and Workforce Planning

FTE makes labor costs easier to predict.

By converting hours into full-time units, FTE removes the noise created by part-time and variable schedules. Your labor budget reflects actual usage, not assumptions.

With FTE, you can:

• Forecast labor costs more accurately
• Plan hiring without overstaffing
• Adjust schedules before overtime becomes a problem

Comparing Staffing Levels Over Time

FTE allows you to compare staffing levels even when schedules change.

Headcount may stay the same while hours rise or fall. FTE captures that shift, making it easier to spot seasonal trends, growth, or staffing gaps early.

Measuring Productivity Per Employee

FTE also creates fair productivity metrics.

Instead of dividing output by headcount, divide it by FTE. This accounts for part-time and variable schedules and shows how efficiently your team uses time.

Metrics like revenue per FTE or tasks completed per FTE provide clearer insight and support better staffing and process decisions.