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FTE Calculation Methods

Emma Bickel
Updated
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This guide will show you how FTE (Full Time Equivalent) is calculated.

 

Contents

Introduction

  • The FTE (Full Time Equivalent) is a useful method to calculate the proportion of benefits an employee should receive based on their hours/weeks worked (such as pay and holidays), and can provide data to show the precise number of roles within your organisation, compared to headcount; where everyone is counted as one person, regardless of hours worked
  • FTE is normally the hours an employee works, divided by the normal full time hours for the post to provide a fraction/percentage of the full time role

  • For educational/seasonal establishments the weeks in the year that the employee works may also be factored into the calculation. In the system the Weeks in Year is considered to be the weeks worked for which the employee is paid (eg 38 weeks of 52 in a year)
  • Where the Weeks in Year differs from the normal amount of weeks worked, this will be factored into the FTE calculation

  • If a person works part of the year and also has part time weekly hours the two calculations will be combined

  • As the definition of the calculation varies between organisations, there are different options available to best suit your requirements:
    • Grade which links to Pay and provides the option to have different Normal Hours and Weeks in Year per Grade if required
    • Job which could relate to budgeted hours and/or headcount per role

    • Fixed where there are standard normal hours for everyone, or a preference to record the FTE as 1 regardless of hours worked

       

System settings

  • Firstly there are a number of fields in System Settings that relate to FTE calculation.
  • The System Settings are accessed via System Configuration > System Settings > System settings tab

Calculate FTE?

The full time hours for the post can be defined in System Settings, from Jobs, Grade or a Fixed value. The System Settings area defines how it should be calculated and a fourth option is available to give you a choice of the first three options that can be varied per employee: Variable
Calculate FTE? presents the options in a dropdown:

  • Grade: where employees have salary Ranges/Spine Points and the FTE is to be calculated against the associated full time Hours and Weeks in Year (if populated)
  • Jobs File: Where each Job role may have different Normal Hours
  • Fixed: Where every full-time person works the same number of hours across the whole organisation, the system will calculate FTE against the Normal Weeks in Year and Fixed Hours for FTE fields in System Settings
  • Variable: if this is selected then there will be a dropdown list presented on the relevant field in the individual Job and Pay page (shown in the next section) where you are able to select from the above choices on a record by record basis.
  • For flexibility and clarity of calculation methods the Variable option is generally recommended but is subject to your requirements
  • The three calculation types are explored in more detail in later section

Default FTE calculation method

This will appear if you select Variable as the Calculate FTE? method above, so you can choose a Default method to appear in Job and Pay records

Decimal places to display for FTE

How many decimal places for FTE should be displayed

Decimal Places for FTE calculation

How many decimal places should be used to calculate the FTE

Fixed Hours For FTE

This is the number of full time hours used in the Fixed FTE calculation method. This can be left as 0 if you wish to have an option to record FTE as 1, regardless of individual Job and Pay hours

Normal Weeks in Year

This is usually set to 52 although sectors may differ. Eg some organisations use 52.143 for accuracy. This can form part of the FTE calculation if there are no differing Normal Weeks in Year specified in an assigned Grade (see FTE and Weeks Worked section)

Note: Changing the FTE Calculation Method (eg from Grade-based to Job-based) in System Settings:

  • Does not affect existing employees
  • Only affects brand new employees (with no job and pay history) going forward.
  • This is because:
    • When a new Job and Pay record is created, it inherits the FTE method from the previous record.
    • The only exception is the Variable method, which will be shown on the individual Job and Pay page, but will still need to be manually amended per individual.

If you're planning to change the FTE method in your system, it’s important to know that it won’t retroactively update existing records. You’d need to manually update those if needed.

If you require assistance to update existing records in bulk then please contact Customer Care.

 

System configuration

  • There are some settings within System Configuration > System Configuration which may also affect FTE calculations due to decimal places

 

FTE in practice

  • FTE is recorded per employee on their Job and Pay record
  • Choose Job, Pay & Reward > Job and Pay
  • The screen will display the Job and Pay history in summary view for the selected employee, with newest record at the top
  • You can change the record in view using the Advanced Search in the top right to view the other records you have access to
  • Select the relevant record or Insert New Record
  • The second tab Pay Details covers Pay and FTE information
  • FTE Calculation Method is determined by the Calculate FTE? setting in System Settings (previous section) and the field will only be visible on the Job and Pay page if the System Setting it is set to Variable. This allows you to choose from the three calculation methods to be used for different types of employees
  • Hours will typically be populated from the Normal Hours recorded against the Job and is another factor in FTE calculation. This can be amended for the individual if their Hours differ to the Normal Hours such as a part time worker
  • The person’s FTE will be calculated based on the chosen method. The figure will update when you click out of the updated Hours or Weeks in Year or you can click on the Recalculate FTE to trigger a manual refresh

Notes: 

  • The FTE may also affect the associated Pay fields which is covered in the Pay Calculations section.
  • When changing Hours in a Job and Pay record, regardless of the FTE Calculation Method the Work Pattern on the Job Details tab should also be updated to match the new hours, otherwise a warning will appear when you attempt to save the record.

 

FTE and weeks worked

  • Weeks in Year can also form part of the FTE calculation if a person works a different amount of weeks to the standard (full time) Weeks in Year (such as term time or seasonal workers). If this value is set to 0 then Weeks in Year will not be used in the calculation of FTE.
  • If Weeks in Year should form part of the calculation then populating this field will then use the value from the Job and Pay record and divide it by the Normal Weeks in Year value from either:

Option 1 - Grade

A message below the Weeks in Year field advises that ‘0 value uses the Grade’s value’ as this is the primary value the system will use to calculate, held in the Normal Weeks in Year in the associated Grade Code. This can be used if you have groups of staff with differing full time Weeks in Year (such as teachers versus office staff) where you can use the associated Grade to differentiate the FTE calculation

  • Note: Grade can also be used to store differing normal full time Hours as part of the Range, Rate or Spine, as another factor in the FTE calculation
  • Within the Grade details code, a message under the Grade Normal Weeks in Year advises ‘0 value uses system default’, so if you don’t need to distinguish this Grade from your organisational normal full time Weeks in Year, this can be left blank, in which case the system will use the secondary method calculation in Option 2 below:

Option 2 - System Settings

Normal Weeks in Year under System Settings will be used (as covered in previous section) if the Grade Normal Weeks in Year is blank or the employee is not assigned to a Grade.

 

Pay calculations

  • FTE calculations will only apply to Basic Pay which is populated from a Grade Rate/Spine Point. Manually entered Basic Pay (for employees with a Range Grade or not attached to a Grade) is unaffected by FTE changes, although other associated pay fields will adjust with FTE as detailed below.
  • Annual Pay/Hourly Rate is calculated based on the Weeks in Year and weekly Hours regardless of whether the Basic Pay is linked to a Grade or manually entered.
  • The figures will vary depending on the Pay Basis; below is an example based on a salary of £30,000.
  • If using a Grade Range, the minimum and maximum figures will adjust with FTE so you can check that the manually entered pro rata Basic Pay is within Range.
Note: The Home Currency Basic Pay is controlled by the Currency field, and will adjust if the Currency is amended (eg to Euros) to show a figure based on the conversion rate in the Currencies code table.

 

Term time pay

In addition to Weeks in Year, HR has specific functionality to cater for term time working which requires separate configuration and maintenance of term dates each year. 

Enabling this feature will add an extra field to the (Job, Pay & Reward >) Job and Pay > Pay Details tab.

 

FTE and pro rata holidays

FTE also applies to Hours based Holiday Entitlements and is used to calculate Pro Rata Holiday Entitlement for part time employees who take their holidays in Hours and where their FTE is less than 1 (a full time person).

 

Scenarios

Scenario 1: FTE Calculation Using Grade 

In the following example the FTE Calculation Method is set to Grade (or this can be applied to all records by the Calculate FTE? field being set to Grade in System Settings).

  • The employee’s Hours on the Job and Pay page show 28. The Grades Code Table shows the normal hours for the grade to be 40; therefore 28/40 will give an FTE of 0.7.
  • 0.7 x Grade Rate of £25,000 = Basic Pay of £17,500
  • Grade can also be used to differentiate the weeks in year worked for a specific group of people assigned to that Grade.
  • In the following example the Normal Weeks in Year field for a specific teaching Grade is showing 44. Remember this field only needs to be populated where it differs from the System Settings figure.
  • This Grade has a Spine Pay Scheme, so clicking on Go to spine will show the weekly hours for the Spine.
  • On the individual Job and Pay page, 38 has been entered in the Weeks In Year field, therefore 38/44 will display an FTE of 0.8636, even though the person works full time weekly hours for the Spine (35), his pay is pro-rated as he does not work the full year

Scenario 2: FTE Calculation Using Job File

In the following example the FTE Calculation Method is set to Job File (or this can be applied to all records by the Calculate FTE? field being set to Job File in System Settings)

  • Using this method means the FTE will be calculated by dividing the Hours from the Job & Pay record by the Normal Hours from the Job Details area
  • In the following diagram the Hours are shown as 28 although the Job shows the Normal Hours as 40. Therefore the FTE is calculated as 28 ÷ 40 = 0.7

Individual Job and Pay

  • Click on the View Job button to go to the Job Details (visibility subject to having access to the Job Details page).
  • Or you can access the Job via:
    • Latest (left-hand) menu: Job, Pay & Reward > Job and Pay Configuration > Jobs
    • Pre-2025 (top) menu: People Admin > Jobs

Scenario 3: FTE Using Fixed

In the following example the FTE Calculation Method is set to Fixed (or this can be applied to all records by the Calculate FTE? field being set to Fixed in System Settings)

  • Fixed FTE is calculated by dividing the Hours from the Job and Pay record by the Fixed Hours for FTE from the System Settings
  • If the normal full time hours are the same for everyone in the organisation you can enter the figure as Fixed Hours for FTE (eg the standard full time week for everyone is 37 hours per week) or you can enter 0 which will calculate the FTE as 1, regardless of hours/weeks worked, which can be a useful option where you don’t wish to apply a calculation

System Settings

The Job and Pay Area

This person works 28 hours per week, 48 weeks out of 52, but the FTE remains as 1 and Basic Pay is not pro-rated (example is using a Grade Rate). 

Note: Even where Fixed FTE is 1, the Hourly Rate will change based on Hours and Weeks in Year where they are not the full time norm.

 

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