Full-Time Equivalent

The phrase ‘full-time equivalent’ is used to describe the number of employees that a company has on a full-time basis. The term is often used in the context of human resources and employee benefits, as well as in business financials.

For example, if a company has 10 employees who work 40 hours per week, and 5 employees who work 20 hours per week, the company would have 15 full-time equivalent employees. The total number of hours worked by all employees divided by the number of full-time equivalent employees gives the average number of hours worked per week by each full-time equivalent employee. In this example, it would be 40 + 20 / 15 = 48.