Position cost math and examples

Overview

This article explains how FTE Tree turns approved or proposed position values into FTE, annualized cost, assigned-cost details, funding allocation, department totals, approval impact, and report output. Use it when you need to understand why a position, department, approval request, or report shows a specific number.

FTE Tree calculates position numbers in two layers:

1. A point-in-time calculation answers what the position looks like on a specific effective date.
2. A period report allocates those point-in-time values across a selected date range.

Position detail pages and approval request summaries show annualized run-rate values for the selected effective date. Reports can turn those annualized values into period amounts for a month, quarter, fiscal year, or other date range.

In calculation tables, a hyphen means the value or comparison is not available or does not apply. A formatted zero, such as $0.00 or 0.0000, means FTE Tree calculated a real zero.

Access needed

Calculation order

For each position and calculation date, FTE Tree evaluates the information in this order:

1. Confirm that the position counts as active on the calculation date.
2. Resolve approved or proposed values for that date, including department, job code, FTE, base wage rate, funding source, custom details, and adjustments.
3. Resolve related job-code values, including pay range and default wage information where your organization uses those settings.
4. Resolve active assignment rows and employee wage information when calculating assigned cost.
5. Resolve compensation settings, including annual hours per FTE.
6. Apply FTE adjustments.
7. Resolve the base wage rate.
8. Apply wage-rate adjustments.
9. Multiply adjusted rate by FTE and annual hours per FTE.
10. Apply annual cost adjustments.
11. Split costs by funding allocation.
12. Calculate headcount.

If a required input is missing, FTE Tree does not invent a value. A new active position or proposed active change is blocked when required position information is missing. Older or incomplete approved data may calculate as zero and show a warning until the missing setup is corrected.

Precision and rounding

FTE Tree uses consistent precision so summaries, approval requests, and reports can reconcile.

FTE Tree rounds using standard half-up rounding. Cost uses the calculated FTE and annual-hours value, then rounds the currency result to cents. Reports also reconcile cent-level rounding so period rows add back to the selected range total.

Example:

• FTE: 0.5333
• Annual hours per FTE: 1,950
• Base wage rate: $25.00

Calculation:

0.5333 x 1,950 = 1,039.94 displayed annual position hours
0.5333 x 1,950 x $25.00 = $25,998.38 annualized cost

The annual-hours line is displayed to two decimal places, and the final cost is rounded to cents.

Active position readiness

An active position needs enough information to produce useful FTE and cost. At minimum, an active position needs a department, job code, FTE, and an acceptable wage source.

Example: inactive position

• FTE: 1.0000
• Base wage rate: $25.00
• Annual hours per FTE: 2,080
• Status value does not count as active

Result:

• FTE: 0.0000
• Position cost: $0.00
• Assigned cost: $0.00
• Headcount: 0.0000

The FTE and wage are present, but inactive status controls the result.

FTE and headcount

FTE is a position value. Users enter the FTE that should apply to the position, and FTE Tree uses that value in position cost, approval impact, department totals, and reports.

Example:

• Position FTE: 0.7500
• Annual hours per FTE: 2,080
• Base wage rate: $25.00

Calculation:

0.7500 FTE x 2,080 annual hours = 1,560.00 position hours
1,560.00 position hours x $25.00 = $39,000.00 annualized cost

Headcount is separate from FTE. In calculation outputs, a position with positive calculated FTE contributes headcount; a position with zero FTE or inactive status contributes zero headcount.

Example:

FTE totals can be fractional. Headcount answers how many active staffing slots are represented.

Annual hours

Annual hours per FTE controls how hourly wage rates become annualized costs. A common value is 2,080, representing 40 hours per week for 52 weeks.

Example:

• FTE: 1.0000
• Annual hours per FTE: 2,080
• Base wage rate: $30.00

Calculation:

1.0000 x 2,080 x $30.00 = $62,400.00

FTE Tree does not automatically change annual hours for leap years. If your organization treats a leap year differently, add the annual-hours value that matches your compensation or budgeting policy.

Example:

• 2026 annual hours per FTE: 2,080
• 2028 annual hours per FTE: 2,088
• FTE: 1.0000
• Base wage rate: $25.00

Calculation:

2026 annualized cost = 1.0000 x 2,080 x $25.00 = $52,000.00
2028 annualized cost = 1.0000 x 2,088 x $25.00 = $52,200.00

The annualized amount is calculated first. Report allocation then controls how much of that annualized amount belongs to a selected date range.

Annual-rate setup

Some organizations enter a full annual amount as the base wage rate. In that setup, annual hours per FTE is usually set to 1.

Example:

• Base wage rate: $80,000.00
• FTE: 1.0000
• Annual hours per FTE: 1

Calculation:

1.0000 x 1 x $80,000.00 = $80,000.00

For a half-time position:

0.5000 x 1 x $80,000.00 = $40,000.00

When using annual-rate setup, enter rate and annual adjustments with that method in mind. A $2.00 wage-rate adjustment behaves like $2.00 added to the annual rate, not $2.00 per hour.

Wage source priority

FTE Tree calculates two cost views for position planning:

• Position cost: Cost based on position-level planning values.
• Assigned cost: Cost based on active employee assignment rows. Active vacant positions can still have position cost, but their assigned cost is zero.

Position cost uses this wage priority:

1. Position base wage rate.
2. Default wage rate from the assigned job code.
3. Inherited default wage rate from the nearest applicable parent job code.
4. Zero, with a warning, if no wage source is available.

If Position Base wage rate is required in your settings, a job-code default can still help reporting and comparison, but it does not satisfy the required position wage detail for active-position readiness.

Position wage examples

Position wage overrides job-code default

Example:

• FTE: 0.7500
• Annual hours per FTE: 2,080
• Position base wage rate: $30.00
• Assigned job-code default wage rate: $26.00

Calculation:

0.7500 x 2,080 = 1,560.00 annual position hours
1,560.00 x $30.00 = $46,800.00

The job-code default exists, but the position wage rate has priority.

Direct job-code default wage

Example:

• FTE: 0.7500
• Annual hours per FTE: 2,080
• Position base wage rate: blank
• Assigned job-code default wage rate: $24.00

Calculation:

0.7500 x 2,080 = 1,560.00 annual position hours
1,560.00 x $24.00 = $37,440.00

This is valid when your organization allows active positions to use job-code defaults as the compensation source.

Inherited job-code default wage

Job codes form a hierarchy. If the assigned job code does not have its own default wage rate, FTE Tree can use the nearest inherited default from a parent job code.

Example hierarchy:

Position setup:

• Assigned job code: Nurse I
• Position base wage rate: blank
• FTE: 0.7500
• Annual hours per FTE: 2,080

Calculation:

Nurse I has no default wage
Nurse has no default wage
Clinical staff has $26.00 default wage
0.7500 x 2,080 x $26.00 = $40,560.00

The inherited parent value is used because it is the closest available default wage in the effective job-code hierarchy.

Closer inherited wage wins

Example hierarchy:

Position setup:

• Assigned job code: Nurse I
• Position base wage rate: blank

Result:

• FTE Tree uses $27.00 from Nurse, not $26.00 from Clinical staff.
• The nearest applicable parent default is used.

Effective inherited wage changes

Inherited job-code wages are effective-dated. Summaries and reports split when an effective inherited wage changes.

Example:

• Assigned job code: Nurse I
• Nurse I default wage: blank
• Parent job-code default wage: $26.00 through June 30
• Parent job-code default wage: $28.00 starting July 1
• FTE: 0.7500
• Annual hours per FTE: 2,080

Point-in-time calculations:

Before July 1:
0.7500 x 2,080 x $26.00 = $40,560.00

On and after July 1:
0.7500 x 2,080 x $28.00 = $43,680.00

Reports use the wage that applies to each day in the report period.

Assigned cost

Assigned cost uses active assignment rows for the selected date. It is separate from position cost.

Assigned cost uses this wage priority for each active assignment:

1. Active assigned employee base wage rate.
2. Position base wage rate, when the employee is active but has no wage rate.
3. Job-code default wage rate, when no employee or position wage rate exists.
4. Inherited job-code default wage rate, when no closer wage source exists.
5. Zero if no active assignment exists, the assigned employee is inactive, or no wage source is available.

Example: employee wage is available

• Assignment FTE: 1.0000
• Employee base wage rate: $27.00
• Position base wage rate: $25.00
• Annual hours per FTE: 2,080

Calculation:

1.0000 x 2,080 x $27.00 = $56,160.00 assigned cost

The employee wage is used because assigned cost prioritizes active employee wage information.

Example: employee wage is missing

• Assignment FTE: 1.0000
• Employee base wage rate: blank
• Position base wage rate: $25.00
• Annual hours per FTE: 2,080

Calculation:

1.0000 x 2,080 x $25.00 = $52,000.00 assigned cost

The assignment is active, so FTE Tree can use the position wage as the assigned-cost wage source.

Example: vacant position

• Position FTE: 1.0000
• Position annualized cost: $52,000.00
• Active assignments: none

Result:

• Position cost: $52,000.00
• Assigned cost: $0.00

This keeps a vacant active position budgeted through position cost without treating the vacancy as staffed cost.

Example: multiple active assignments

Calculation:

Employee A = 0.6000 x 2,080 x $30.00 = $37,440.00
Employee B = 0.4000 x 2,080 x $25.00 = $20,800.00
Assigned cost = $58,240.00

Assignment FTE can differ from position FTE. When it does, position cost and assigned cost intentionally answer different questions.

Adjustment types

Adjustments modify FTE, wage rate, or annual cost. They are applied in the calculation order shown below.

Simple percentage adjustments of the same type use the original base for that stage. Compound percentage adjustments use the running total after prior adjustments.

Adjustment examples

FTE amount adjustment

Example:

• Base FTE: 0.7500
• FTE amount adjustment: 0.2500

Calculation:

0.7500 + 0.2500 = 1.0000 total FTE

Simple FTE percent adjustment

Example:

• Base FTE: 1.0000
• FTE percent adjustment: 10%
• FTE percent adjustment: 5%

Calculation:

10% of 1.0000 = 0.1000
5% of 1.0000 = 0.0500
1.0000 + 0.1000 + 0.0500 = 1.1500 total FTE

Both simple percentages use the original FTE for that adjustment stage.

Compound FTE percent adjustment

Example:

• Base FTE: 1.0000
• Compound FTE percent adjustment: 10%
• Compound FTE percent adjustment: 5%

Calculation:

1.0000 x 10% = 0.1000
1.0000 + 0.1000 = 1.1000
1.1000 x 5% = 0.0550
1.1000 + 0.0550 = 1.1550 total FTE

Compound percentages build on the running total.

Wage-rate differential

Example:

• FTE: 1.0000
• Annual hours per FTE: 2,080
• Base wage rate: $25.00
• Wage-rate adjustment: $2.00

Calculation:

$25.00 + $2.00 = $27.00 adjusted rate
1.0000 x 2,080 x $27.00 = $56,160.00

Wage-rate percent adjustment

Example:

• Base wage rate: $30.00
• Wage-rate percent adjustment: 10%

Calculation:

$30.00 x 10% = $3.00
$30.00 + $3.00 = $33.00 adjusted rate

If FTE is 1.0000 and annual hours per FTE is 2,080:

1.0000 x 2,080 x $33.00 = $68,640.00

Annual benefit load

Example:

• Annualized wage cost before annual adjustments: $56,160.00
• Annual cost adjustment: 25%

Calculation:

$56,160.00 x 25% = $14,040.00
$56,160.00 + $14,040.00 = $70,200.00 total annualized cost

Max basis amount

A max basis amount limits how much of the base value is used for a percentage adjustment. It preserves the sign of the base value, so negative adjustments can be limited the same way positive adjustments are limited.

Example:

• Annualized wage cost before annual adjustments: $80,000.00
• Annual percent adjustment: 5%
• Max basis amount: $50,000.00

Calculation:

Basis used = $50,000.00
$50,000.00 x 5% = $2,500.00 adjustment
$80,000.00 + $2,500.00 = $82,500.00 total annualized cost

Without the max basis amount, the adjustment would have been $4,000.00.

Max impact amount

A max impact amount limits the final impact of a percentage adjustment.

Example:

• Annualized wage cost before annual adjustments: $75,000.00
• Annual percent adjustment: 10%
• Max impact amount: $5,000.00

Calculation:

$75,000.00 x 10% = $7,500.00 raw adjustment
Max impact applies: $5,000.00
$75,000.00 + $5,000.00 = $80,000.00 total annualized cost

For a smaller base amount:

$40,000.00 x 10% = $4,000.00
$4,000.00 is within the max impact amount
$40,000.00 + $4,000.00 = $44,000.00 total annualized cost

Negative adjustment limits

Max basis and max impact limits also apply to negative percentage adjustments.

Example:

• Annualized wage cost before annual adjustments: $50,000.00
• Annual percent adjustment: -10%
• Max impact amount: $3,000.00

Calculation:

$50,000.00 x -10% = -$5,000.00 raw adjustment
Max impact applies: -$3,000.00
$50,000.00 - $3,000.00 = $47,000.00 total annualized cost

Fixed annual adjustment

Example:

• Annualized wage cost before annual adjustments: $52,000.00
• Annual fixed adjustment: $3,000.00

Calculation:

$52,000.00 + $3,000.00 = $55,000.00 total annualized cost

Pay range comparison

When a job code has a pay range, FTE Tree can compare the position or employee wage rate with the range effective on the selected date. The comparison is informational. It helps users see whether a rate is below range, within range, above range, or where it falls inside the range.

Example:

• Pay range minimum: $22.00
• Pay range maximum: $30.00
• Position base wage rate: $25.00

Result:

• The position is within range.
• The rate is $3.00 above the minimum and $5.00 below the maximum.
• The rate is 37.50% through the range.

Calculation:

($25.00 - $22.00) / ($30.00 - $22.00) = 37.50%

If the minimum and maximum are the same, range position cannot be calculated because there is no spread to compare against.

Funding allocation

Funding sources split calculated position cost across budgets, grants, funds, or accounts. If any funding rows are entered, the percentages must total exactly 100.00%.

Example:

• Annualized position cost: $70,200.00
• General fund: 60.00%
• Grant: 40.00%

Calculation:

$70,200.00 x 60.00% = $42,120.00
$70,200.00 x 40.00% = $28,080.00

The position detail, approval impact view, and position cost audit detail report can show these funding rows so finance users can trace where the cost is allocated.

Ratio funding entry

When users enter funding allocations in Ratio mode, FTE Tree converts the portions to percentages.

Example:

• General fund ratio: 1
• Grant ratio: 2

Calculation:

Total ratio portions = 1 + 2 = 3
General fund = 1 / 3 = 33.33%
Grant = 2 / 3 = 66.67%

FTE Tree reconciles ratio percentages so the final applied funding allocation totals exactly 100.00%.

Funding allocation with period cost

Funding rows can show both annualized and period amounts.

Example:

• Annualized position cost: $52,000.00
• Report period amount: $4,333.33
• General fund: 75.00%
• Grant: 25.00%

Calculation:

Annualized General fund = $52,000.00 x 75.00% = $39,000.00
Annualized Grant = $52,000.00 x 25.00% = $13,000.00
Period General fund = $4,333.33 x 75.00% = $3,250.00
Period Grant = $4,333.33 x 25.00% = $1,083.33

Small cent differences can occur when rounded funding rows are displayed separately. Use report totals for reconciliation.

Approved versus proposed math

When a proposed change is prepared, FTE Tree calculates the approved value and the proposed value using the same rules. The variance is the proposed value minus the approved value.

Example:

• Approved FTE: 0.7500
• Proposed FTE: 1.0000
• Approved annualized cost: $39,000.00
• Proposed annualized cost: $52,000.00

Variance:

1.0000 - 0.7500 = 0.2500 FTE increase
$52,000.00 - $39,000.00 = $13,000.00 annualized cost increase

If a proposed change set has more than one effective date, the request impact uses the first requested effective date for workflow selection and displays each requested line with its own effective date for review.

Effective-dated examples

Effective-dated values determine which position values apply on each date.

Future-dated value

Example:

• Today is May 1.
• Current position wage rate: $25.00
• Future wage rate effective July 1: $28.00

Result:

• May 1 calculation uses $25.00.
• July 1 calculation uses $28.00.

Retroactive value

Example:

• A wage rate of $26.00 is entered with an effective date of January 1.
• The change is approved on March 15.

Result:

• Reports for February use $26.00 after the value is approved.
• Prior report output may need to be rerun if users need the updated value reflected in exported data.

Midyear FTE change

Example:

• January 1 through June 30 FTE: 1.0000
• July 1 through December 31 FTE: 0.5000
• Non-leap year

Date-range FTE:

Jan 1-Jun 30 = 181 days at 1.0000 FTE
Jul 1-Dec 31 = 184 days at 0.5000 FTE
Weighted FTE = ((181 x 1.0000) + (184 x 0.5000)) / 365
Weighted FTE = 273 / 365
Weighted FTE = 0.7479

Midyear cost change

Using the same period:

• Annual cost January 1 through June 30: $52,000.00
• Annual cost July 1 through December 31: $26,000.00

Actual calendar-day allocation:

$52,000.00 x 181/365 = $25,786.30
$26,000.00 x 184/365 = $13,106.85
Date-range cost = $38,893.15

Point-in-time summaries

A point-in-time summary asks, "What annualized run rate is true on this date?"

Example:

• Effective date: July 1
• Position FTE on July 1: 0.5000
• Annualized run-rate cost on July 1: $26,000.00

Result:

• FTE: 0.5000
• Annualized position cost: $26,000.00

The cost is not prorated because the summary is a point-in-time annualized run-rate view. To see how much cost belongs to a month, quarter, fiscal year, or other date range, run a report with the needed date range and cost allocation method.

Report allocation

Reports allocate annualized amounts into the selected date range. The allocation method controls the factor used for each date span.

Actual calendar days

Actual calendar days is the default. It uses each day's actual share of its calendar year.

Example:

• Annualized cost: $52,000.00
• February 2026: 28 days in a 365-day year
• February 2028: 29 days in a 366-day year

Calculation:

February 2026 = $52,000.00 x 28/365 = $3,989.04
February 2028 = $52,000.00 x 29/366 = $4,120.22

A full January 1 through December 31 report still equals one annualized amount when nothing changes during the year. Leap years have one more day, but each day is a slightly smaller share.

When a range crosses calendar years, FTE Tree calculates each calendar year's portion separately. For example, December 31, 2027 through January 1, 2028 uses one day at 1/365 and one day at 1/366.

Even monthly

Even monthly smooths full months to one-twelfth of annualized cost. This can be useful when your reporting process expects each full month to carry the same budget amount.

Example:

• Annualized cost: $52,000.00
• Report grouping: month
• Allocation method: Even monthly

Calculation:

Full month share = $52,000.00 x 1/12 = $4,333.33 before final reconciliation

Because cents must reconcile, most months show $4,333.33 and the final included segment absorbs the rounding difference so the selected range totals correctly.

Partial months use the included days in that month:

Partial month factor = (included days / days in month) x 1/12

Example:

• Annualized cost: $52,000.00
• Included range: February 15-28, 2026
• February 2026 has 28 days

Calculation:

Included share = (14 / 28) x 1/12
Period cost = $52,000.00 x (14 / 28) x 1/12 = $2,166.67

Monthly breakdown with a midmonth change

Monthly reports split calculations by effective-date changes inside the month.

Example:

• Wage rate changes on July 15.
• July has 31 days.
• July 1-14 uses the old wage rate.
• July 15-31 uses the new wage rate.

Result:

• July FTE is day-weighted across the two segments.
• With Actual calendar days, July cost uses the actual share for July 1-14 and July 15-31.
• With Even monthly, July's one-twelfth monthly share is split between July 1-14 and July 15-31 by included days.
• August uses the new wage rate for the whole month unless another effective-dated change applies.

Report output examples

Reports use the same calculated data as position detail and approval impact, but present it in different layouts.

The position cost audit detail report is the best place to trace a number back to FTE, wage source, adjustments, annual hours, funding allocation, warnings, and period allocation.

Troubleshooting

FTE is zero

Check:

• Does the position count as active on the calculation date?
• Does the position have an FTE value effective on or before that date?
• Is the selected report date range before the FTE starts?
• Was a proposed FTE change approved before the report was run?

Cost is zero but FTE is not zero

Check:

• Is annual hours per FTE configured for the calculation date?
• Does the position have a base wage rate?
• If position wage is optional, does the assigned job code have a direct or inherited default wage?
• Is the wage effective on or before the calculation date?
• Is the user allowed to view wage data when comparing assigned cost?

Assigned cost is zero

Check:

• Is there an active assignment on the calculation date?
• Is the assigned employee active for cost?
• Does the assigned employee have a wage rate, or can assigned cost fall back to the position or job-code wage?
• Is the assignment effective start after the report period?
• Did the assignment end before the selected effective date?

Position cost and assigned cost differ

This is often expected.

Use position cost for budgeted staffing cost. Use assigned cost when you need wage and assignment details for currently assigned employees.

Report total differs from the visible summary

Check:

• Is the summary showing an annualized run rate while the report is showing a date-range amount?
• Are the same effective dates included?
• Are the same departments and positions included?
• Is the same cost allocation method selected?
• Has the report been rerun after recent approved changes?
• Is the visible summary rounded more compactly than the report export?

Funding totals do not look like 100%

Check:

• Do the funding rows total exactly 100.00%?
• Were ratios converted into percentages with cent-level reconciliation?
• Are you comparing annualized funding rows with period funding rows?
• Are rounded row displays being compared with report totals?

Funding allocation must total exactly 100.00% when funding rows are entered. If you need to remove a funding allocation through import, use the clearing rules documented in Batch imports and exports.

Related setup articles

For setup instructions, see:

• Position settings for FTE, wage requirements, funding source behavior, headcount, and rounding.
• Compensation settings for annual hours per FTE, pay grades, and pay ranges.
• Job codes and pay grades for default wage rates, inherited job-code values, and pay grades.
• Position adjustments for adjustment setup and availability.
• Assignments for assignment date ranges, assignment FTE, and employee staffing details.
• Reports for report catalog, saved views, history, output layouts, permissions, and exports.