How do I calculate FTE?

FTE = Hours Worked per Week ÷ Standard Full-Time Hours. For a standard 40-hour week, an employee working 32 hours is 32 ÷ 40 = 0.80 FTE. For a team, add all individual hours and divide the total by the standard hours: Total FTE = Sum of All Hours ÷ Standard Hours.

Why is FTE important for ACA compliance?

Under the Affordable Care Act (ACA) employer mandate, businesses with 50 or more FTEs must offer health insurance to full-time employees or face penalties. The ACA defines full-time as 30+ hours per week (not 40), and part-time employees are counted as 1 FTE per 120 hours worked per month. Employers near the 50-FTE threshold must track this carefully.

How does the SBA use FTE for small business size standards?

The U.S. Small Business Administration (SBA) uses FTE counts to determine if a business qualifies as a small business for federal contracts. The SBA defines FTEs as employees paid for 1,000 or more hours per year. Businesses above the SBA size threshold for their industry may not qualify for set-aside contracts or certain loan programs.

What counts as full-time hours under the ACA?

The ACA defines full-time as 30 or more hours per week — not 40. For ACA FTE calculations, use 30 as the standard hours denominator. A 30-hour-per-week employee is 1.0 ACA FTE; a 15-hour employee is 0.5 ACA FTE. This differs from the typical payroll and HR definition of 40 hours per week.

Can FTE exceed the number of employees?

No — total FTE can never exceed headcount. If everyone works full-time (40 hours), total FTE equals total headcount. FTE is always less than or equal to headcount. However, employees can work overtime (more than 40 hours per week), in which case one person may count as more than 1.0 FTE in some calculations.

What does 0.5 FTE mean?

A 0.5 FTE employee works half the standard full-time hours — typically 20 hours per week in a 40-hour standard, or 15 hours per week in a 30-hour ACA standard. In practice, 0.5 FTE positions are common for part-time roles, job shares (two employees splitting one position), and project-based contractor allocations. A contractor engaged for 50% of their time on your project is billed and tracked as 0.5 FTE for budgeting purposes.

How is FTE used in project management?

In project management, FTE measures the labor input required or allocated to a project. A project requiring 2.0 FTE needs 80 person-hours per week regardless of how many people are assigned — it could be two full-time employees, four half-time staff, or one full-time plus four quarter-time contributors. Resource planning tools express capacity in FTEs to normalize across employees with different schedules. The project plan can then compare required FTE against available FTE to identify gaps.

How do you calculate FTE for part-time employees?

Divide each part-time employee's weekly hours by the standard full-time hours, then sum all values. Example: three part-timers working 15, 20, and 25 hours per week at a 40-hour standard: (15 + 20 + 25) ÷ 40 = 60 ÷ 40 = 1.5 FTE total. For ACA purposes, use 30 as the denominator instead of 40, and calculate monthly (hours worked ÷ 120 per month rather than weekly hours ÷ 30 per week) to match the IRS methodology.

Full Time Equivalent Calculator (FTE)

What Is a Full-Time Equivalent (FTE)?

The full time equivalent calculator on this page converts weekly hours worked into FTE count for ACA compliance, SBA size standards, and HR workforce planning. A full-time equivalent (FTE) normalizes employee working hours into a common measure — one FTE represents one employee working full-time hours (typically 40 hours per week for HR, or 30 hours per week for ACA purposes). Part-time employees count as a fraction of an FTE based on their actual hours.

FTE is used across HR, finance, and compliance to compare staffing levels consistently, regardless of whether a workforce is made up entirely of full-time workers, entirely of part-timers, or a mix of both. A company with 10 full-time and 20 half-time employees has a total of 20 FTEs.

FTE Formula

The FTE calculation is a simple division:

FTE = Total Hours Worked per Week ÷ Standard Full-Time Hours per Week

For a single employee: an employee working 32 hours per week at a 40-hour standard is 32 ÷ 40 = 0.80 FTE. For a team of multiple employees, add all their weekly hours and divide the total by the standard: a team of 5 employees working 20 hours each totals 100 hours per week, which is 100 ÷ 40 = 2.50 FTE.

Single Employee vs. Total Workforce FTE

This calculator supports both modes. Use Single Employee to evaluate one person's FTE contribution — for example, when classifying a contractor or determining benefits eligibility. Use Multiple Employees to assess your entire team's FTE count for compliance thresholds, budget planning, or headcount reporting.

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FTE for ACA Employer Mandate Compliance

The Affordable Care Act (ACA) requires employers with 50 or more FTEs to offer health insurance coverage to full-time employees or face penalties under the employer shared responsibility provision. For ACA purposes, the IRS defines full-time as 30 or more hours per week — not 40.

To calculate ACA FTE, change the Standard Full-Time Hours to 30 in this calculator. The ACA also requires employers to count part-time employees' monthly hours divided by 120 to get their FTE contribution. Employers with 49.5 FTEs in one month and 50.5 in another are in a compliance gray zone and should consult an employment attorney or HR advisor. For payroll and overtime calculations, see the time and a half calculator.

FTE for SBA Small Business Size Standards

The U.S. Small Business Administration uses FTE counts to determine whether businesses qualify as small businesses for federal contracts, loans, and set-aside programs. SBA FTE counts employees paid for 1,000 or more hours in a year. Businesses above the industry-specific size standard may lose eligibility for certain programs.

Retail trade: typically 500 employees or less
Professional services: $8–$25 million annual receipts or 150–500 employees depending on NAICS code
Construction: $16.5–$39.5 million annual receipts
Manufacturing: typically 500–1,500 employees depending on NAICS code

FTE in HR Workforce Planning

Beyond compliance, FTE is a core metric in HR budgeting and workforce planning. Budget headcounts are often expressed in FTEs rather than individual employees because it normalizes the comparison across different employment types. A project requiring 2.0 FTE could be staffed by two full-time employees, four half-time employees, or any combination that totals 80 hours per week.

When converting from hours to FTE for planning purposes, use this calculator with the Multiple Employees mode to see how your current staffing translates to FTE, then adjust individual hours to model different staffing configurations. For time card and weekly hour tracking, use the time card calculator.

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Standard Hours: 40 vs. 30 vs. 35

The standard hours denominator matters significantly for FTE calculations. Use 40 for most general HR, budgeting, and workforce planning purposes. Use 30 specifically for ACA compliance. Some countries and industries use 35 or 37.5 hours as their standard full-time week — the calculator lets you set any value you need. Always confirm which standard applies to your specific use case before submitting FTE counts for compliance or reporting purposes.

Sources & References

ACA Employer Shared Responsibility — Full-Time Employee Definition — Internal Revenue Service
SBA Size Standards — Full-Time Equivalent Employees — U.S. Small Business Administration

Full Time Equivalent (FTE) Calculator

FTE Calculator

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