Hiring glossary
What does FTE mean?
FTE, or full-time equivalent, is a unit that expresses an employee’s or a team’s working hours as a fraction of one full-time workload, so that 1.0 FTE is one full-time person and 0.5 FTE is half of a full-time schedule.
The basic calculation is hours worked divided by the hours your organisation counts as full time. If full time is 40 hours a week, someone working 20 hours is 0.5 FTE and someone working 30 hours is 0.75 FTE. A team of two full-timers and two people on 20 hours is 3.0 FTE, even though the headcount is four. Budgets, workforce plans and job requisitions are often approved in FTE rather than headcount for this reason.
What counts as “full time” depends on the employer and the country. In the UK, GOV.UK says there is no specific number of hours that makes someone full time or part time, though a full-time worker typically works 35 hours or more a week. In Australia, the Fair Work Act’s maximum weekly hours for a full-time employee are 38, plus reasonable additional hours. In Canada’s federal jurisdiction, standard hours are 40 a week.
In the US, FTE also has a legal use. For the Affordable Care Act’s employer rules, a full-time employee is one who averages at least 30 hours of service a week, or 130 hours a month. An employer is an “applicable large employer” if it had at least 50 full-time employees, including full-time equivalents, on average in the prior year. The IRS method for that test adds up the monthly hours of all non-full-time employees (counting no more than 120 hours for any one person) and divides by 120 to get the number of FTEs for the month.
When you use FTE in a hiring plan, say which full-time standard you used and keep it consistent across teams and countries, or the comparisons will mislead.
Also called: full-time equivalent, FTE calculation, whole-time equivalent (WTE).
Example
A clinic’s reception is staffed by one full-time receptionist on 40 hours and three part-timers on 16, 20 and 24 hours. On a 40-hour standard that is 1.0 + 0.4 + 0.5 + 0.6 = 2.5 FTE across a headcount of four.
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