Full-time Equivalent (FTE)

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The Full-time Equivalent (FTE) is a calculation, as the term suggests, of the number of equivalent full-time employees needed to perform the duties of an organization or a component of it.

FTE is calculated by taking the number of hours needed to perform those duties (which includes hours for training, holidays, and paid leave), and dividing it by the number of hours that a full-time employee would have in a fiscal year (in a non-leap year, this is usually 2,080 hours).

The FTE does not usually equal the number of employees in an organization. For example, an organization may choose to perform the duties that would be performed by one FTE, by hiring two part-time employees instead, to avoid paying benefits that would be required on a full-time employee. Another scenario would be an organization needing 2.1 FTE mechanics, but instead of hiring a full-time mechanic who would be idle much of the time, it requires the employees to work some overtime to cover the shortfall.