Full-time equivalent (FTE)
Reviewed by Jakob Schubert · Co-Founder, Basqo · 2026-11-02
Definition
A full-time equivalent (FTE) expresses a person’s contracted working hours as a share of one full-time position: 40 contracted hours in a company with a 40-hour week is 1 FTE, and 20 hours is 0.5 FTE. HR and Finance use FTE instead of headcount to plan capacity and workforce costs, because part-time contracts make a plain headcount misleading.
Formula
FTE = contracted working hours ÷ full-time working hours (both for the same period: week, month or year)
Key takeaways
- FTE expresses contracted working hours as a share of one full-time position: 20 hours in a 40-hour week is 0.5 FTE.
- Headcount counts people, FTE counts capacity: 3 full-time and 2 half-time contracts add up to a headcount of 5 and 4 FTE.
- The reference week differs by company: with a 37.5-hour week, a 30-hour contract is 0.8 FTE, not 0.75.
- Salaries scale with FTE, so a workforce cost plan built on FTE sits closer to payroll than one built on headcount.
How do you calculate FTE?
Divide each person’s contracted hours by the hours of a full-time position at the same company, for the same period (week, month or year). Then add up the results.
Example | Contracted hours per week | FTE |
|---|---|---|
Full-time employee | 40 | 1 |
Part-time employee | 30 | 0.75 |
Working student | 20 | 0.5 |
Working student | 10 | 0.25 |
The example assumes a 40-hour full-time week. A team made up of the people in the first three rows has 2.25 FTE and a headcount of 3.
Which full-time week counts?
There is no universal reference week. FTE is relative to the full-time week that applies at the company, and that is where most mistakes start. In a company with a 37.5-hour week, a 30-hour contract is 0.8 FTE, not 0.75.
Averages don’t settle it either. In Germany, full-time employees aged 15 to 64 worked 40.2 hours a week on average in 2024, just under the EU average of 40.3 hours (Destatis, 2025). That is a statistic, not a contract.
Legal thresholds are different again: the US tax authority counts an employee as full-time at 30 or more hours of service per week, or 130 hours per month (IRS). An internal FTE report should state its own reference week and use the same one in every entity.
Headcount vs FTE: what’s the difference?
Headcount counts people. FTE counts capacity. A team of 5 people with 3 full-time and 2 half-time contracts has a headcount of 5 and 4 FTE.
The gap is not a corner case: in 2024, 29% of employed people aged 15 to 64 in Germany worked part-time (Destatis, 2025).
Both numbers have their uses. Headcount drives per-person costs such as equipment and licences. FTE drives salary-related costs and shows how much working capacity a team really has. A headcount plan that only counts people overstates capacity as soon as part-time contracts come in.
Why FTE matters for workforce cost planning
Budget: salaries scale with FTE, so a plan built on FTE sits closer to payroll than a plan built on headcount.
Variance analysis: when actual costs differ from the plan, a change in FTE (more hours, fewer hires) is a different cause than a change in pay. A variance analysis shows which one it was.
Hiring: an open position can be planned as a full-time or a part-time position, which changes its cost.
Common mistakes
- Using a different full-time week per team without saying so, which makes FTE incomparable across entities.
- Counting people on long leave as full FTE in the capacity plan, although they don’t add capacity.
- Mixing headcount and FTE in the same report, so the totals don’t add up.
In Basqo
How to track FTE across teams and entities
In a spreadsheet, FTE goes stale whenever someone changes their hours and the HR export isn’t updated. That is one of the reasons spreadsheets fail headcount planning. Basqo picks up changes in working hours from the connected HRIS on an ongoing basis (where the HRIS provides them) and shows the monthly development of workforce costs by cost type and FTE, down to the single position. Variance analysis then separates FTE-driven changes from changes in pay.
Shiftmove, which plans with Basqo and Personio, saves Finance and HR 30+ hours a month (customer story).
Headcount planning in BasqoFrequently asked questions
FTE stands for full-time equivalent: the contracted working time of a person as a share of one full-time position.
No. Headcount counts people, FTE counts contracted hours relative to a full-time position. Two half-time employees make up a headcount of 2 and 1 FTE.
It depends on the contract. A 37.5-hour contract is 1 FTE if 37.5 hours is the company’s full-time week, and a 30-hour contract is then 0.8 FTE.
Usually not for one person. Most companies cap a single contract at 1 FTE and track overtime separately.
Related resources
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