What is Full-Time Equivalent Hours and how to calculate Full-Time Equivalent Hours

You might have read or heard the term “full-time equivalent employee” at some point or another. As an employer, it is important to know what a full-time equivalent employee is and how to calculate them for numerous situations.

What is a Full-Time Equivalent Employee?

A full-time equivalent employee is defined as multiple part-time employees that add up to on full-time employee. When you add up part-time employees to create full-time hours, this is a full-time equivalent employee.


Some employment laws will impose certain restrictions based on the size of your business. In determining the size of your business, the law may refer to the amount of  full-time equivalent employees. Knowing how many full-time equivalent employees you employ is vital for following the correct rules and regulations, as well as things like taxes. Among others, you will need to know the amount of  full-time equivalent employees for these laws:

  • ACA
  • Employee Retention Credit
  • Paycheck Protection Program
  • COBRA

How to Calculate Full-Time Equivalent Hours

To work out an employee’s full-time equivalent hours, you need to calculate their workweek as a percentage of a full-time workweek. For example, if your full-time workweek is 40 hours, a part-time employee working 20 hours a week, is half a Full-Time Equivalent employee. The full-time equivalent is based on the amount of  hours rather than the amount of  employees. Three part-time employees might make up a full-time equivalent in some cases.


While a 40-hour workweek is a nice round number, employers with other workweeks can still calculate things easily. For example, a part-time employee who works 21 hours for an employer where the normal workweek is 35 hours, is 0.6 full-time equivalent.


Full-time equivalent hours are useful for several things, it can be helpful to calculate the average employee productivity or revenue per employee. It will also help when ensuring your business complies with laws and regulations.

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