# What is full time equivalent?

Full-time equivalent is one of the most used metrics by companies that want to determine the workload of their employees, with the perspective of trying to determine how much part-time employees work and if the hours they work add up to the same number of hours. hours worked by full-time employees.

It is essential for accounting purposes and to determine salaries, as well as to calculate the company’s expenses when paying its workers.

## How to calculate full time equivalent?

Full-time equivalent is a calculated metric that sums all actual full-time employees with the fractional values ​​of all part-time employees, contractors, students, and interns.

How to calculate full-time equivalents. Count full-time employees + Sum (fractional contribution for all non-full-time employees)

Example:

If you have 10 full-time employees, an accountant who works 2 days a week, and a student who currently only works 3 days a week, the calculation would be 10 full-time employees + 2/5 for the accountant + 3/ 5 for the student = 11

In this way, this figure reflects the company’s work capacity, regardless of the actual number of employees and variations in hours worked during a given period.

## Advantages of measuring the equivalent in time

From a financial standpoint, knowing your full-time equivalent number makes it easier to calculate a number of performance metrics, such as revenue.

Knowing what the full-time equivalent is is also important from a legal and government reporting perspective, and for knowing the obligations that govern smaller and larger companies.

Ultimately, it is important for a company to determine the full-time equivalent because it allows it to better understand the effectiveness and usefulness of its part-time workers, based on the amount of work performed and, perhaps, most importantly, because the workers Part-timers typically earn less and do not receive the same benefits that should be offered to full-time employees.

Remember that all of the factors mentioned end up costing the company something and affecting its results.