FTE Pro Rata Calculator
Calculate Adjusted Salary for Part-Time Employees
Understanding FTE and Pro Rata Salary
Calculating salaries for part-time employees requires understanding the relationship between the standard working week and the actual contracted hours. This concept is known as Pro Rata, a Latin term meaning "in proportion," and is essential for HR professionals, business owners, and employees moving to part-time schedules.
The core of this calculation is the FTE (Full-Time Equivalent). This metric quantifies the hours worked by one employee on a part-time basis compared to a full-time employee.
How the Calculation Works
Our calculator follows a standard formula used by payroll departments worldwide. Here is the step-by-step logic:
- Step 1: Determine FTE. Divide the Actual Contracted Hours by the Standard Full-Time Hours.
Example: 20 hours / 40 hours = 0.5 FTE. - Step 2: Calculate Pro Rata Salary. Multiply the Full-Time Base Salary by the FTE.
Example: $60,000 x 0.5 = $30,000 Actual Salary.
Why is FTE Important?
FTE is not just about salary. It is used for:
- Benefits Eligibility: Many companies offer benefits only to employees above a certain FTE (e.g., >0.75).
- Resource Planning: Project managers use FTE to understand how many "heads" they have available for work. A team of four people at 0.5 FTE produces the output of two full-time employees.
- Holiday Entitlement: Annual leave days are often pro-rated based on the FTE value.
Common Scenarios
Scenario A: Reduced Hours
An employee requests to work 4 days a week instead of 5. If the standard week is 40 hours, they will work 32 hours. The FTE is 32/40 = 0.8. They will receive 80% of their previous salary.
Scenario B: Job Sharing
Two employees split a single 40-hour role. One works 24 hours (0.6 FTE), and the other works 16 hours (0.4 FTE). Together, they equal 1.0 FTE.
Frequently Asked Questions
What is a standard working week?
This depends on your company policy and location. In the US, 40 hours is standard. In the UK or Europe, 37.5 or 35 hours is often used as the full-time baseline.
Does this affect hourly rate?
No. In a pro rata arrangement, the implicit hourly rate remains the same as a full-time employee; you are simply paid for fewer hours.