ACA Full-Time Equivalent (ALE) Calculator
Calculate full-time equivalent employees to see if you're an Applicable Large Employer under the ACA.
Reviewed by theComplianceToolsLibrary Editorial Team · Last updated
Key facts
- ALE threshold
- An average of 50 or more full-time + full-time-equivalent employees
- Full-time employee
- Works 30+ hours/week or 130+ hours/month
- FTE formula
- Total monthly part-time hours (capped at 120 per employee) ÷ 120
- Measurement
- Averaged across the months of the prior calendar year
What is an Applicable Large Employer (ALE)?
The ACA's employer shared-responsibility rules apply only to Applicable Large Employers — those that averaged at least 50 full-time and full-time-equivalent (FTE) employees during the prior calendar year. A full-time employee works at least 30 hours per week (or 130 hours per month).
Part-time employees don't count as whole heads; instead, you add up their monthly hours (counting no more than 120 per person) and divide by 120 to get FTEs. Add full-time employees plus FTEs for each month, average across the year, and if the result is 50 or more, you're an ALE that must offer affordable, minimum-value coverage or risk penalties.
How to use this tool
- 1
Enter full-time employees
Enter your average number of full-time employees (30+ hours/week).
- 2
Enter part-time hours
Enter total monthly hours worked by part-time employees.
- 3
Review FTEs
The tool converts part-time hours into full-time-equivalent employees.
- 4
See your ALE status
View whether your combined count reaches the 50-employee ALE threshold.
Common mistakes to avoid
- Counting only full-time employees and ignoring full-time-equivalents.
- Counting more than 120 hours per part-time employee in a month.
- Using a single month instead of averaging across the year.
- Forgetting to aggregate employees across commonly owned (controlled-group) entities.
What to do next
- If you're an ALE, offer affordable, minimum-value coverage to full-time employees.
- Track full-time status with a consistent measurement method.
- Prepare to file Forms 1094-C and 1095-C.
- Check coverage affordability with the ACA Affordability Calculator.
Sources
Frequently asked questions
How do I know if I'm an Applicable Large Employer?
Average your full-time plus full-time-equivalent employees across the prior calendar year; 50 or more makes you an ALE.
How are full-time-equivalent employees calculated?
Add up part-time employees' monthly hours (no more than 120 each) and divide by 120 to get FTEs for that month.
What counts as a full-time employee under the ACA?
An employee who works an average of at least 30 hours per week or 130 hours per month.
Do I have to combine related companies?
Yes. Businesses under common ownership (a controlled group) are generally aggregated to determine ALE status.
Related tools
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