Position cost calculation reference

Overview

Use this reference when you need to reproduce an annualized Position cost or Assigned cost from its saved values. It documents accepted precision, calculation order, adjustment behavior, assignment treatment, and effective-date boundaries.

For a practical investigation sequence, start with Reconcile position costs. For allocation of an annualized result into report periods and funding lines, see Report period allocation and rounding.

Decimal places and accepted values

FTE Tree calculates financial results to the supported number of decimal places shown below. This keeps page and export values consistent.

An input with extra meaningful decimal places is rejected instead of silently rounded. For example, 25.00001 is not accepted as an Hourly pay rate, 80000.001 is not accepted as an Annual pay rate, and 0.33333 is not accepted as FTE. Extra trailing zeros do not change a value: 2080.0000 is accepted as exact 2080.00, but 2080.001 is rejected.

Blank and zero are different. A hyphen means a value is unavailable or does not apply. $0.00 means a real money result of zero. A value such as -0.00 or -0.0000 is shown as positive zero rather than as a separate negative-zero amount.

Accepted value ranges

The limits below are accepted values. A value outside the applicable range is rejected rather than reduced to the nearest limit:

Maximum basis and maximum impact are limits, so they must be zero or positive even when the adjustment itself is negative. A pay rate adjustment’s money limits use the smaller pay rate range. An FTE adjustment’s limits use the FTE range. Annual cost money limits use the annual cost range.

Rounding method

FTE Tree uses half-up rounding at each named calculation step. A value exactly halfway to the next unit rounds away from zero:

The point where rounding occurs matters. A displayed intermediate is not automatically a new input.

Position annualized cost

For one selected effective date, calculate position cost in this sequence:

The base formula is:

Hourly Position cost = adjusted Hourly pay rate × annual hours per FTE × adjusted FTE

Annual Position cost = adjusted Annual pay rate × adjusted FTE

Basic example

$25.00 × 0.7500 × 2,080.00 = $39,000.00

The $39,000.00 is an annualized run rate. It is not automatically reduced because part of the year has passed.

Why displayed hours are not reused

Suppose:

• FTE is 0.3333.
• Annual hours is 2,080.00.
• Base pay rate is $20.0000/hour.

The displayed hours are:

0.3333 × 2,080.00 = 693.264000, displayed as 693.26.

The cost formula keeps the original operands:

$20.00 × 0.3333 × 2,080.00 = $13,865.28.

FTE Tree does not multiply $20.00 × 693.26. That would produce $13,865.20 and understate the cost by eight cents.

Missing, zero, and inactive base values

Missing and exact zero are different, but calculations start that part at zero in either case. Later adjustments still run:

• A missing FTE choice starts at 0.0000; a fixed or percentage FTE adjustment then runs from that amount.
• A missing Position Base pay rate starts at zero; the Position detail identifies the missing pay, and pay rate adjustments then run.
• Missing annual hours prevents an Hourly component from being annualized, so the pay-derived amount starts at $0.00; annual cost adjustments still run afterward for retained older information.
• A calculation containing only Annual pay components does not require annual hours.
• An entered exact-zero FTE or pay follows the same arithmetic without being treated as missing.
• Annual hours cannot be entered as zero. Its minimum is 0.01; only a missing annual hours value uses 0.00 in the calculation.

For example, if annualized Position cost before annual cost adjustments is $0.00 and a fixed annual cost after percentages adjustment is $125.00, the final Position cost is $125.00, not $0.00.

Position status is different. If the Position does not count as active, its final FTE and Position cost are zero regardless of its entered values or adjustments. Its assignments cannot contribute position holders or Assigned cost. A dated assignment allocation can still remain in assigned FTE, as explained in Assigned cost.

Position and Job code pay rates

Every Position keeps its own effective Base pay rate and Pay rate basis. A Job code Base pay rate is a suggestion when entering or reviewing the Position value. Changing the suggestion does not rewrite an existing Position pay rate or cost.

Inherited job code adjustments can affect the position when they apply on the selected date. A dated job code placement change can therefore change inherited adjustments without replacing the saved position base pay rate.

Adjustment order

FTE, pay rate, and annual cost adjustments each use the same four-part order:

1. Fixed amount before percentages.
2. Non-compounding percentage.
3. Compounding percentage.
4. Fixed amount after percentages.

The full calculation finishes all FTE adjustments first, then pay rate adjustments, then annualization and FTE, and then annual cost adjustments.

For the same exact type, the displayed sequence number controls which line runs first. When the same adjustment comes from more than one source, Allow duplicates determines whether it applies once or once for each source.

One Position can use at most 20 adjustments on one effective date, counting FTE, pay rate, and annual cost adjustments together. This includes inherited and directly selected adjustments after duplicate handling. A save or approval that would add a twenty-first adjustment is rejected, and the previously completed amount remains available.

Non-compounding and compounding percentages

For a $100.00 basis and two 10.00% non-compounding adjustments:

• First impact: $100.00 × 10.00% = $10.00.
• Second impact: $100.00 × 10.00% = $10.00.
• Result: $120.00.

For two 10.00% compounding adjustments:

• First impact: $100.00 × 10.00% = $10.00; running amount is $110.00.
• Second impact: $110.00 × 10.00% = $11.00.
• Result: $121.00.

Each FTE adjustment impact and running total is rounded to four decimal places. Hourly pay rate impacts and totals are rounded to four decimal places; Annual pay rate and annual cost impacts and totals are rounded to cents. The next line uses that rounded running result.

Fixed pay rate adjustments have their own Hourly or Annual basis. Same basis only rejects a mismatch with the Position Base pay rate. Convert allows FTE Tree to use annual hours when one value is Hourly and the other is Annual. Pay rate percentages need no basis unless their limits require one. If annual hours or another required value is missing, FTE Tree reports the problem instead of skipping that adjustment.

Maximum basis and maximum impact

A percentage adjustment can limit the amount used as its basis and the impact it can produce.

Example:

• Percentage: 10.00%.
• Starting basis: $1,000.00.
• Maximum basis: $600.00.
• Maximum impact: $50.00.

The capped basis is $600.00. The amount before the maximum is $60.00. The maximum impact reduces it to $50.00.

Limits are entered as zero or greater even when the adjustment is negative. A negative percentage keeps its negative direction after a limit is applied.

Negative adjustments and the zero floor

FTE Tree keeps a negative running amount while later adjustments still need to run.

Example:

• Starting annual cost: $10.00.
• Fixed-before adjustment: $-20.00.
• Running amount: $-10.00.
• Fixed-after adjustment: $15.00.
• Completed amount: $5.00.

The result is $5.00; the temporary negative amount is not replaced by zero.

Only a completed negative FTE, pay rate, or annual cost group becomes zero. The calculation shows a matching floor line and warning. A completed exact zero has no floor warning.

Assigned cost

Position cost represents the planned position. Assigned cost is calculated separately for each active employee assignment.

For each active assignment:

Hourly assigned cost = applicable Hourly pay rate × annual hours per FTE × assignment FTE

Annual assigned cost = applicable Annual pay rate × assignment FTE

Assigned cost uses the Position’s effective Base pay rate and basis. Employee records do not define a standard pay amount, and Employee custom values do not participate in this calculation. A dated Position pay change splits the assignment result on its effective date.

Assigned cost does not use the Position’s adjusted FTE, Adjusted pay rate, or annual cost Adjustments. It uses the assignment’s own FTE and the Position Base pay rate. Annual hours participates only when the Position rate is Hourly. This separation is why an Adjustment can change Position cost without changing Assigned cost.

Each assignment result is rounded to cents before the assignments are added. This means two assignment lines are independently reviewable and their displayed costs add to assigned cost.

Example:

Position cost and Assigned cost can differ because of vacancies, several Employees, different assignment FTE, or Position Adjustments that apply only to Position cost.

Assigned FTE, position holder count, and assigned cost answer different questions:

It is therefore possible to see assigned FTE above zero while position holder count and assigned cost are zero. That means an assignment allocation exists for the date, but the position or employee does not meet the active-staffing rule used for position holders and cost.

Ended, Cancelled, and Voided assignments

These outcomes have different meanings:

The end date is the first date when an ended assignment no longer counts. An assignment beginning January 1 and ending July 1 counts through June 30.

Use Cancelled only when the assignment’s start date is on or after the cancellation effective date. For example, an assignment scheduled to begin August 1 can be cancelled effective July 15 because it had not begun. If the assignment was valid and the person really worked through August 1, use an August 2 end date instead. If the row was a duplicate, named the wrong employee or position, or was otherwise an entry error that should never have counted, use Voided.

Use Voided even when an erroneous row is discovered after its planned start date. For example, if a January 1 assignment to the wrong employee is discovered on January 10, voiding it excludes it from January 1 onward. Do not void an assignment merely because it later ended; end a valid assignment so its real staffing interval remains in the reconciliation.

Cancelled and Voided assignments stay in history with the recorded reason and action date so reviewers can see what happened. Keeping them in history does not make them count toward staffing. Neither outcome contributes FTE, position holders, or cost on any date, and a future assignment that was cancelled is not shown as though it had been active before the cancellation was recorded.

Effective-date boundaries

A report splits its selected range whenever a relevant value changes. Boundaries can include:

• Position status, FTE, Base pay rate, Pay rate basis, Department, or Job code.
• Annual hours per FTE.
• Adjustment value, type, order, or applicable inheritance.
• Assignment start or end.
• Employee status or Department used to determine whether an assignment contributes.
• Funding percentages.
• Department GL assignments and effective department, job code, or position hierarchy placement used for report grouping.

The old value applies through the day before the new effective date. The new value applies on the effective date.

If a Department GL assignment changes in the middle of a report period, FTE Tree splits the period on that effective date and assigns each interval to the GL code that applied then. An inherited GL assignment follows the department path effective for the same interval.

If only a department, job code, GL code, label, or another grouping value changed while the annualized inputs stayed the same, the report can show an additional row or split. That presentation split does not change the independently rounded position-range money target.

Approved, proposed, and completed approval amounts

A position request compares the approved values effective on the request date with the proposed values packaged in that request. Both sides use the same FTE, pay, annual hours, adjustment, cap, floor, and rounding rules described in this article.

The approved and proposed annualized amounts can each be reproduced from their own values. Do not calculate the proposed amount by adding a displayed variance to a rounded approved total unless that is the final displayed comparison you are checking. Reproduce both sides from their own dated inputs, then subtract the two rounded results to reproduce the variance.

If an approved value, a proposed request value, annual hours, or a referenced adjustment changes after submission, the request needs revision before final approval. This protects the comparison from silently changing while it is being reviewed.

Completed approvals preserve the financial values used for the decision. Approval applies the new dated values, but it does not rewrite a report that was completed earlier. Run a new report when you need the approved change included.

Activity history preserves the supported decimal places for recorded money, pay, FTE, hours, percentage, and other decimal changes. A page may use a shorter display for readability; for example, an FTE recorded as 0.5000 may appear as 0.5 in a nearby summary.

Point-in-time and date-range amounts

Do not compare an annualized amount directly with a monthly or partial-year amount.

Period FTE and employee headcount use a day-weighted average. For one period, multiply each applicable FTE or headcount value by the number of days it applied, add those products, and divide by the number of days in the period. Each distinct active employee counts once per day even when that employee has several assignments. An active unassigned employee remains part of employee headcount.

Related guidance

• Reconcile position costs provides the comparison worksheet.
• Position costs and headcount introduces the primary formulas.
• Position adjustment examples provides worked examples for each adjustment family.
• Report period allocation and rounding explains date-range allocation and remainder handling.