Notes from Dr. Borkosky

Divide the top number by the bottom number (60 hours/40 hours = 1.5 FTE). EddyHR is the all-in-one HR tool built with you in mind. During the ever-changing rules around the PPP, FAQ #40 was issued to provide some relief to businesses that were unable to hire employees to fill empty roles. Using the frozen data, calculate the FTE by employee using the. Article written by:

GBQ is a tax, consulting and accounting firm operating out of Columbus, Cincinnati, Toledo and Indianapolis. The calculation for full-time employees (individuals who work 30 hours per week or more on average) is extremely easy. So if you have 10 full-time employees working for you, that equates to 10 FTEs. If your business meets the pay or play penalty then you will want to plan a way to provide benefits to your employees. Round down to the nearest whole number (ex: if your number is 6.7, round down to 6). *There are still some unknowns here on how many hours per week will count as full-time.

To get your total figure, you must add your full-time and part-time FTEs together. You must add your full-time and part-time FTEs together to get your total FTE. Employees who work more than 40 hours a week count as one FTE.

The United States Treasury hasn’t explicitly said the calculation will be based on a 30-hour week. The first round of PPP funds went out April 3, 2020—and the small businesses that received funding in early April are coming to the end of the eight-week period following loan origination and having to navigate forgiveness options and fill out the PPP Loan Forgiveness Application.

Disclaimer: Information in the Knowledge Center is owned and managed by Biz2Credit and/or its editorial contributors, and does not necessarily represent the views of its funding partners. Text STOP to cancel. Not only would the funds help them keep their staff employed, but the loan was up to 100 percent forgivable if used for approved expenses (including payroll, rent, mortgage interest, and utilities). Step 5: It’s likely that your result from step 4 will contain a decimal. If you can prove this, you may not need to go through the exercise of calculating your FTEs. Get out of the chair, take your eyes off the computer, and recharge your batteries. Step 1: Write down the number of part-time workers you have.

This payroll would be excluded from the FTE calculation and the other payrolls would be included. And a big part of the equation?

Lucky Lanes also has 10 part-time employees.

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What are these FTE safe harbors and how do they work?

Taking the example above, 100/30 is 3.3. It may even help to write the name of each part-time worker if you don’t have too many.

We’re not the only people who talk about us. not including overtime or holiday hours) worked by employees divided by the number of compensable hours applicable to the fiscal year.” Therefore, on an annual basis, an FTE is about 2,080 hours. The next step is determining which calculation option is best for you – Actual or Simplified. The borrower is able to choose the base period that is most beneficial; either 02/19/19 through 06/30/19 or 01/01/20 through 02/29/20. According to the U.S. Treasury Department, a full-time equivalent employee is any employee who works 40 hours a week or more. These exemptions are added to your average FTE calculation in Table 1 of PPP Schedule A Worksheet right above where it says Box 2. 4.

It is easy to miss.

If you recall prior to the PPP Flexibility Act, the cure date was June 30, 2020. Like many small business owners across America, you’ve likely received or are hoping to receive a PPP loan from the SBA. Create a summary tab showing all time periods needed to be calculated: Separate “Actual” from “Simplified”.

If you have questions, please contact a member of GBQ’s SBA team – Rebekah Smith, Dustin Minton, or Jeremy Bronson. The important little gray area in between work and play. When the Small Business Administration announced the launch of the Paycheck Protection Program in response to the coronavirus, the biggest draw for small businesses? For this example, we’ll examine a fictitious bowling alley called Lucky Lanes. © Biz2Credit Inc 2020. The people that help you help your people. Director, Restaurant Services. Please remember this is not based on FTEs; rather, this is based on the definition used by the Small Business Administration (SBA) and counts each employee as one. Any employees who during the Covered Period or the Alternative Payroll Covered Period (a) were fired for cause, (b) voluntarily resigned, or (c) voluntarily requested and received a reduction of their hours.

Now dividing it by 30 you get 6.66.

Ok, so now that you know how to calculate the average number of full-time equivalent employees (FTE number), let’s determine what you need to know to meet the staffing requirements to receive loan forgiveness. Required fields are marked *, Business Math: How to Calculate a Pay Cut by Percentage, Business Math Series: Probability of a White Christmas. No matter the case, if you need to learn how to calculate FTEs, we’ve got you covered.

New Guide: Health Reimbursement Arrangements (HRAs). If you weren’t an employer then, enter the average weekly hours for each part-time employee you expect to employ during the current calendar year. We’re all ears! Full-time employee (FTE) calculations.

Once that is done, you’ll have your total FTE number. Step 6: You’ve now successfully calculated your FTE number for your part-time workers. Step 4: Take the result of step 3, and divide the number by 30. The calculation indicates the workload of an employed person that could be comparable on similar circumstances. Any positions for which the Borrower made a good-faith, written offer to rehire an individual who was an employee on February 15, 2020, and the Borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020; Any positions for which the Borrower made a good-faith, written offer to restore any reduction in hours, at the same salary or wages, during the Covered Period or the Alternative Covered Period and the employee rejected the offer; and. Text HELP for help.

Nowadays, many business owners must calculate their FTEs in order to receive Payment Protection Program (PPP) loan forgiveness.

The report will recommend an option based on the lookback period and calculation method with the highest number in the right column. First, you must add all of your part time workers together to find your total (most part-time employees work less than 30 hours a week). Calculating FTE is pretty simple, and most payroll providers provide PPP loan support. You’re fine with what you’ve got. Business owners must prove that they maintained the same number of FTEs during the 24-week period to receive full loan forgiveness. This was a recent change announced. Hillsboro, Oregon 97124 Therefore, if you end your chosen covered period at Week ten and apply for forgiveness during Week 12, you will need to calculate your FTEs as of Week 12. If you employ part time or hourly workers, they may have an FTE of less than 1.0. There is no double-dipping allowed. That being said, these calculations are used by adding your part-time and full-time employment count together. Tip:  An FTE ratio of less than one can be “overcome” if the amount of spending is greater than the loan amount by more than the reduction. Let’s say that you have 20 full-time employees and 10 part-time employees. Watch a short demo to get a feel for Eddy’s all-in-one HR software. To get your total FTE you just have to multiply 10 by 25, which is 250. We’re not the only people that think we’re awesome.

There are two eligible methods for calculating your FTEs during the covered and base period: The PPP application provides several exceptions in regard to counting FTEs during the covered period, namely, if any employee rejects a written good-faith re-hire offer, or if an employee was fired during the covered period for cause, voluntarily resigned, or voluntarily requested a reduction of their hours. Identify which payroll periods will be used for each FTE calculation for the time periods described above. Let’s discuss an example:  Say Employee A voluntarily quits during Week two of your chosen covered period and you have been unable to fill that position through Week eight, the end of your chosen covered period. The scramble to secure PPP loans has been top-of-mind for small business owners. It will make the math a lot faster! The Treasury defines a full-time employee as an employee who works 40 or more hours per week, so FTE is calculated on a scale of 1.0, with 1.0 being the equivalent of 40 hours per week.

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