How are full-time equivalent employees (FTEs) calculated under the Affordable Care Act?

Author: Tracy Morley, XpertHR Legal Editor

FTEs equal the number of full-time employees (those working 30 or more hours per week) plus the number of hours worked in a month by part-time employees (those working fewer than 30 hours per week) divided by 120. An employer may exclude full-time seasonal employees who work fewer than 120 days during the year.

For example, if an employer employs 40 full-time employees and 20 part-time employees each working 24 hours per week (or 96 hours per month), this employer has a total of 56 FTEs as calculated below:

  • 20 (part-time employees) × 96 (hours worked per month) = 1,920
  • 1,920 ÷ 120 = 16 FTEs
  • 40 (full-time employees) + 16 FTEs = 56 FTEs