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HR Glossary

Full-time
equivalent (FTE)

HR metrics
What is a full-time equivalent (FTE)?

A full-time equivalent (FTE) expresses workforce size in units of full-time workload rather than people: one FTE equals one full-time load (a 38-hour week under Australia's National Employment Standards), so two half-time employees are 1.0 FTE.

How is FTE calculated?

Divide each employee's contracted hours by the full-time standard, then sum. An employee on 19 hours against a 38-hour standard is 0.5 FTE; a team of ten such people is 5.0 FTE across ten headcount. Both numbers matter and they answer different questions: FTE measures capacity and cost, headcount measures the number of humans to manage, onboard, licence and communicate with.

Where FTE earns its keep

Budgeting and planning: salary budgets, ratio metrics (revenue per FTE, HR-to-employee ratio) and demand modelling all behave sensibly in FTE and misleadingly in headcount whenever part-time work is common. Casuals convert via average hours worked, which makes FTE the only honest way to compare a casualised operation with a permanent one.

The classic FTE mistakes

Confusing FTE with headcount in systems that licence or provision per person; hiding overwork by treating sustained overtime as invisible extra FTE that never appears in the plan; and planning growth in FTE while forgetting that 6.0 FTE of new capacity might be nine actual people who all need desks, managers and onboarding. Keep both numbers in view and label which one every report is using.

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HR-to-employee ratio

The HR-to-employee ratio is the size of the HR function relative to the workforce it supports, usually expressed as HR FTE per 100 employees.

Read the definition →Related term

Span of control

Span of control is the number of direct reports a manager has.

Read the definition →Related term

Revenue per employee

Revenue per employee is annual revenue divided by headcount (or, more precisely, by FTE).

Read the definition →HR Glossary

All terms

Every definition, with the local rules, rates and thresholds attached.

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Where
Compono fits.

Compono is a talent intelligence platform: an applicant tracking system and an employee engagement platform built on the same people data.

Plan the workforce in the units the work actually comes in.

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Common questions

Is a casual employee an FTE?

A casual contributes FTE equal to their average hours divided by the full-time standard. Their FTE moves with their roster, which is precisely why casual-heavy workforces should be planned in FTE.

Why do headcount and FTE diverge?

Part-time work, job sharing and casual patterns. A workforce of 130 people can be 100 FTE; reporting either number alone misstates the organisation.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with the official source for your jurisdiction or your own adviser. Last reviewed July 2026.