A full-time equivalent, or FTE, converts total scheduled or worked hours into the number of standard full-time positions those hours represent. It is a workload and capacity measure, not necessarily a count of individual people.
How is FTE calculated?
The basic formula is total hours ÷ standard full-time hours. If a team supplies 720 hours in a month and one full-time role is defined as 160 hours, the team represents 720 ÷ 160 = 4.5 FTE.
Illustrative FTE calculation
| Resource group | Monthly hours | FTE at 160 hours |
|---|---|---|
| Three full-time staff | 480 | 3.0 |
| Four part-time staff | 240 | 1.5 |
| Total | 720 | 4.5 |
The denominator should match the organization's stated work calendar and exclude or include leave, breaks and overtime consistently.
FTE vs. headcount
Headcount counts people. FTE measures equivalent capacity. Seven people can represent 4.5 FTE when some work part time, while overtime can produce delivered hours above nominal FTE.
How is FTE used in outsourcing?
Providers may price a defined number of dedicated or shared FTEs. The contract should state productive hours, shrinkage, coverage, holidays, overtime, backfill and whether management roles are included.
What should be measured alongside FTE?
Pair capacity with workload, output, quality, backlog and service levels. A higher FTE count does not prove that a process is efficient or that the team has the required skill mix.
