Project Management guide · Cost and resources
Full-Time Equivalent (FTE): Meaning, Formula and Examples
A full-time equivalent (FTE) is a unit that expresses how much working time a person or team provides compared with one full-time employee. One FTE equals one person working a full-time week; someone working half that is 0.5 FTE.
Key takeaways
- FTE = hours worked / full-time hours for the same period.
- Always state the full-time basis you use.
- Adjust FTE for productive time before staffing a project.
- FTE measures capacity; headcount measures people.
The FTE formula
FTE = hours worked (or planned) / hours in a full-time schedule for the same period
The organisation defines what full time means, commonly 35, 37.5 or 40 hours a week. Always state the basis you use, because the same hours give different FTE figures under different definitions.
- Weekly: hours per week / standard weekly hours.
- Annual: hours per year / standard annual hours (40 hours x 52 weeks = 2,080 hours is a common basis).
- Project: total effort hours / (standard weekly hours x number of weeks).
Worked example 1: FTE of a mixed team
Full time in this organisation is 40 hours a week.
| Person | Hours per week | FTE |
|---|---|---|
| Project manager | 40 | 1.0 |
| Developer 1 | 40 | 1.0 |
| Developer 2 | 40 | 1.0 |
| Analyst (part time) | 24 | 0.6 |
| Designer (shared) | 16 | 0.4 |
| Total | 160 | 4.0 |
Five people provide 4.0 FTE, because 160 / 40 = 4.0. Headcount is 5 but capacity is 4 full-time people.
Worked example 2: converting effort to FTE
A project needs 1,200 hours of development effort over 10 weeks. With a 40-hour standard week:
- Hours one FTE supplies in 10 weeks: 40 x 10 = 400 hours.
- FTE needed: 1,200 / 400 = 3.0 FTE.
- Adjust for productive time: if only 80% of hours go on project work, each FTE supplies 320 project hours, so 1,200 / 320 = 3.75 FTE.
The second figure is the one to staff against. Planning with 3.0 FTE would leave the team 240 hours short. See effort estimation for how the 1,200 hours might be estimated.
Worked example 3: FTE and cost
If a fully loaded developer costs $90 per hour, 3.75 FTE for 10 weeks at 40 hours costs 3.75 x 40 x 10 x $90 = $135,000. FTE figures convert easily into the project budget and cost estimation because they tie directly to hours.
FTE vs headcount
| FTE | Headcount | |
|---|---|---|
| Measures | Working time supplied | Number of people |
| Part-time worker on 20 of 40 hours | 0.5 | 1 |
| Useful for | Capacity, cost and effort planning | HR records, desk space, licences |
| Can be fractional? | Yes | No |
Common mistakes
- Not stating the full-time basis (35, 37.5 or 40 hours).
- Treating 1.0 FTE as 40 productive project hours; meetings and admin reduce it.
- Adding a person to several projects at 1.0 FTE each.
- Mixing contracted FTE (paid hours) with allocated FTE (hours on this project).
- Assuming two 0.5 FTE people deliver the same as one 1.0 FTE person; handovers and context switching cost time.
Free templates for this topic
Frequently asked questions
What does FTE stand for?
Full-time equivalent: a unit that expresses working time relative to one full-time employee.
How do you calculate FTE?
Divide the hours worked or planned by the hours in a full-time schedule for the same period. For example, 30 hours in a 40-hour week is 0.75 FTE.
How many hours is 1 FTE per year?
It depends on the organisation's full-time definition. With 40 hours a week, a common basis is 40 x 52 = 2,080 hours; some organisations subtract holidays to get productive hours.
What is 0.5 FTE?
Half of a full-time schedule, for example 20 hours a week when full time is 40 hours.
What is the difference between FTE and headcount?
Headcount counts people; FTE measures the working time they provide. Two half-time people are a headcount of 2 but 1.0 FTE.
How do you convert project hours to FTE?
Divide total effort hours by the hours one FTE supplies in the project period. 1,200 hours over 10 weeks at 40 hours a week is 1,200 / 400 = 3.0 FTE.
Can FTE be more than 1 for one person?
In calculations it can, if someone works regular overtime, but planning anyone above 1.0 FTE is a warning sign of burnout and risk.
Why do project managers use FTE?
It makes capacity, demand and cost easy to compare across teams with different working patterns, and it converts simply into budgets.
Is 37.5 hours a week 1 FTE?
It is if the organisation defines full time as 37.5 hours. FTE is always relative to the organisation's own standard.
How is FTE used in resource plans?
Resource plans list each role with the FTE needed per period, such as 2.0 FTE developers in months 2-6; see project resources.
Does 1 FTE mean 100% project time?
Not necessarily. 1 FTE means a full-time schedule; the share actually spent on the project is usually lower once meetings and other duties are counted.